Land Use Policy 61 (2017) 302–315 Contents lists available at ScienceDirect Land Use Policy journal homepage: www.elsevier.com/locate/landusepol Probing the grounds: Developing a payment-by-results agri-environment scheme in Finland Traci Birge a,* , Marjaana Toivonen a , Minna Kaljonen b , Irina Herzon a a Department of Agricultural Sciences, P.O. Box 27, FI-00014, University of Helsinki, Finland b Finnish Environment Institute, P.O. Box 140, 00251 Helsinki, Finland a r t i c l e i n f o Article history: Received 1 April 2016 Received in revised form 9 November 2016 Accepted 14 November 2016 Keywords: Biodiversity Farmer interviews Indicators Outcome-based instruments Public payments Results-based schemes a b s t r a c t Results-oriented approaches are widely regarded as an effective means to improving cost-effectiveness of agri-climate-environment schemes. We designed a hypothetical payment-by-results scheme for biodi- versity conservation on environmental grasslands in Finland. The scheme would pay farmers a premium if the site contains a set number of indicator species, which were selected based on vascular plant sur- veys of the target habitat type. We presented the hypothetical scheme to 20 farmers and six experts (researchers, officials and advisors) in agricultural policy for their opinions on the payment-by-result approach generally and the hypothetical scheme specifically. The indicator species list proved suitable for identifying sites with high total species richness of vascular plants and also appeared feasible in the eyes of the farmers. Farmers were mostly positive about the approach and, mainly, thought their peers and society at large would receive it positively. The main concerns were about implementation, especially verifying the biodiversity results. People working for the national control body were the most critical and could not see how the hypothetical scheme could fit into the current institutionalised programme. Expe- rience in other countries may provide solutions for overcoming such obstacles. The results are highly relevant for a discourse on social experimentation and cost-efficient delivery of public goods for public money. © 2016 Elsevier Ltd. All rights reserved. 1. Introduction The agri-climate-environment schemes (AES) are the single most important tool for securing and improving the environmen- tal and ecological state of the agricultural environments across the EU (EEA, 2004; Batáry et al., 2015), including in Finland (Kaljonen, 2011). As with any multi-objective policy tool, AES require con- stant development to remedy shortcomings. Among the most critical problem areas are the lack of incentives for achieving actual results, insufficient targeting, and difficulty in tailoring activities to diverse farm circumstances (e.g. Kleijn et al., 2011; Marggraf, 2003; Whittingham, 2007; Arponen et al., 2013; McKenzie et al., 2013). The European Court of Auditors (2011) found that objec- tives of many AES were not specific enough for assessing whether or not they had been achieved. Furthermore, by paying participants a flat-rate remuneration for pre-specified management (“action” or “management” oriented approach), the current scheme design dis- courages participants from striving for innovative and site-specific * Corresponding author. E-mail address: traci.birge@helsinki.fi (T. Birge). approaches (Burton and Schwartz, 2013; Kaljonen, 2006, 2008). The approach not only dis-incentivises farmers (Kaljonen, 2006; Keenleyside et al., 2011), but makes their behaviour dependent on monetary stimuli at the expense of appreciation of results of their work (Herzon and Mikk, 2008). Verification is entirely in the hands of officials, who are often perceived as a threat (Birge and Herzon, 2014; Helenius and Seppänen, 2004; Wilson and Hart, 2001). It is a widely held expert view that AES need to become more results-oriented (European Network for Rural Development and EC, 2010). The European Court of Auditors (2011) recommenda- tions to the European Commission for improving efficiency of AES include more precise targeting of measures and clearer objectives; tailoring more demanding measures to local circumstances; and creating clear indicators for measuring success. The report specifi- cally recommends examining the usefulness of outcome-based, or payment-by-results (PBR), measures (European Court of Auditors, 2011 pp. 49). Such results-based agri-environment payments are already in use in several member states, including Germany, France and The Netherlands (comprehensive list in Allen et al., 2014). These include paying landowners or other managing bodies for defined biodiversity or ecosystem results, either exclusively or as a bonus on top of a payment for management actions. The payment http://dx.doi.org/10.1016/j.landusepol.2016.11.028 0264-8377/© 2016 Elsevier Ltd. All rights reserved.