Results over red tape: Two instruments to make sustainable farming pay off
Rewarding farmers for environmental performance could make sustainable farming in Europe more financially attractive and cut bureaucracy. A new Agora Agriculture policy brief outlines two complementary instruments to incentivise public goods provision. By integrating these instruments into their next CAP plans, Member States could significantly improve the efficiency of Europe’s farming policy.
EU institutions are currently negotiating the next Common Agricultural Policy (CAP) and aim to grant Member States greater flexibility as to how they pursue its objectives. A new policy brief by Agora Agriculture outlines how Member States can benefit from this flexibility by adopting a performance-based approach that makes sustainability an attractive business case for farmers, while cutting bureaucracy.The brief draws on findings from Agora's recent land-use study on Germany Die Zukunft von Landnutzung und Ernährung in Deutschland, which examined the political conditions under which sustainable farming and its economic viability can go hand in hand. It presented two instruments that would help achieve such goals.
The first instrument benchmarks environmental performance at the farm level. Indicators are used to set minimum requirements as benchmarks. Those farms that surpass these benchmarks earn financial premiums - turning performance into income. The second instrument elevates biodiversity conservation to the cross-farm and landscape level: An index is used to measure the potential of agricultural landscapes to promote biodiversity and to set targets. Farmers located in a specific agricultural area can jointly decide on the measures needed to achieve these targets at the lowest possible cost. Both farm-level benchmarking and cross-farm coordination are intended to be introduced gradually, via pilot phases, and could be embedded into Member States’ upcoming CAP plans.
If applied consistently in the CAP and other agricultural policies, both instruments can provide powerful incentives in terms of environmental performance. Moreover, such policies can provide farmers with more entrepreneurial freedom while also reducing red tape. Instead of prescribing specific measures, a performance-based approach could remunerate farmers based on the environmental and climate outcomes they deliver.
Where performance can be reliably measured, a number of existing regulatory requirements and administrative burdens could be simplified or replaced altogether. Shifting away from compliance-checking to rewarding performance could reduce bureaucratic overhead for farmers and public authorities alike, making the overall system more efficient.
The 12-page policy brief Less red tape, more results: How benchmarking and landscape coordination can make sustainable farming more competitive is available for free download below.
