Land Use Policy 33 (2013) 20–30 Contents lists available at SciVerse ScienceDirect Land Use Policy jou rn al h om epa ge: www.elsevier.com/locate/landusepol Investigating the influence of the institutional organisation of agri-environmental schemes on scheme adoption Evy Mettepenningen a,∗ , Valerie Vandermeulen a , Katrien Delaet a , Guido Van Huylenbroeck a , Eric J. Wailes b,1 a Department of Agricultural Economics, Ghent University, Coupure Links 653, 9000 Ghent, Belgium b Department of Agricultural Economics and Agribusiness, University of Arkansas, 217 Agriculture Building, Fayetteville, AR 72701, USA a r t i c l e i n f o Article history: Received 31 May 2012 Received in revised form 30 November 2012 Accepted 7 December 2012 Keywords: Agri-environmental schemes Flanders Arkansas Institutional organisation Adoption a b s t r a c t In this paper, the objective is to assess the influence of the institutional organisation of AESs on farm- ers’ participation in the schemes. The literature reveals that the institutional organisation of AESs can influence participation in the schemes and that this participation rate is an important indicator of the schemes’ eventual environmental effectiveness. The paper describes several alternative ways to design and implement AESs, and two study regions were chosen in which several of these alternatives have been applied in practice: the region of Flanders, in Belgium; and the state of Arkansas, in the US. On the basis of the results obtained one could argue that farmers are generally more in favour of a flexible approach towards AESs, in which they have the freedom to decide on contract terms and the related payment. However, although this could have a positive effect on the environmental effectiveness of the schemes, it could also significantly increase the transaction costs. © 2012 Elsevier Ltd. All rights reserved. Introduction Since the Second World War agriculture in Europe has been characterised by increasing specialisation and intensification, which has led to negative externalities for the environment. The European Union reacted to this situation by introducing agri- environmental schemes (AESs) under Reg. (EC) 2078/92, which later became the backbone of the second pillar of the Common Agricultural Policy (CAP). Participation in these schemes is volun- tary and farmers receive a compensation payment for delivering environmental measures which exceed the requirements set out in the cross-compliance. 2 Positive effects on the sustainability of farm management have already been observed for some AESs, but despite this, the effectiveness of AESs is often contested (Kleijn et al., 2004; Kleijn and Sutherland, 2003; Knop et al., 2006; Primdahl ∗ Corresponding author. Tel.: +32 9 264 59 43; fax: +32 9 264 62 46. E-mail addresses: Evy.Mettepenningen@UGent.be (E. Mettepenningen), Valerie.Vandermeulen@UGent.be (V. Vandermeulen), Katrien.Delaet@gmail.com (K. Delaet), Guido.VanHuylenbroeck@UGent.be (G. Van Huylenbroeck), ewailes@uark.edu (E.J. Wailes). 1 Tel.: +1 479 575 2278; fax: +1 479 575 5306. 2 The term ‘cross-compliance’ refers to some prior conditions European farmers have to fulfill regarding nature and the environment, public health, the health of plants and animals and animal welfare. Fulfilling these requirements is a prerequi- site for obtaining the single farm payment from the first pillar of the CAP, and since 2007 also for obtaining subsidies from the second pillar (including the AESs). et al., 2003). One factor influencing this environmental effective- ness is the extent of participation by farmers in the schemes (Finn et al., 2007; Kleijn and Sutherland, 2003). In fact, for the Belgian region of Flanders, Finn et al. (2007) found that participation by farmers was the criterion that most limited the environmental per- formance of AESs. In 2010, 9.9% of the Flemish agricultural area was under AESs (Dumez and Van Zeebroeck, 2011). In the European Union (EU) in general (EU-15), 24% of the utilised agricultural area was covered by agri-environmental contracts (most recent figures from 2002) (European Environment Agency, 2006). The uptake lev- els, however, differ substantially between the member states: with participation of above 75% in, for example, Finland (which has a quasi cross-compliance arrangement, Nitsch et al., 2005) and less than 10% in the Netherlands and Spain. Thus, one of the keys to improving the environmental effec- tiveness of AESs is to achieve higher participation by farmers. The question is then: how can AESs attract more participants? To answer this question, it is necessary to look in more depth at the farmers’ decision-making process in relation to the adoption of AESs. Falconer (2000) states that in the context of agri- environmental decision-making, at least two aspects of farmers’ attitudes should be considered: attitudes towards the environ- ment and willingness to undertake conservation management (related to business or personal objectives) and secondly, atti- tudes/perceptions toward the agri-environmental programs and their implementation. However, agri-environmental programs are not so homogeneous – not even within the EU where the European 0264-8377/$ – see front matter © 2012 Elsevier Ltd. All rights reserved. http://dx.doi.org/10.1016/j.landusepol.2012.12.004