Contracts for the provision of agri-environmental and climate public goods in agriculture – experiences and challenges 🇬🇧

Kontrakty na dostarczanie rolno-środowiskowych dóbr publicznych w rolnictwie – doświadczenia i wyzwania” – podsumowanie wyników projektu CONSOLE 🇵🇱

Date 🗓️

10/05/2022- 11am -1pm 

Location 📍

WARSAW – online

Organizer 🙎‍♀️

Institute of Economics and Finance

Participating CONSOLE Partner(s) 💡

Warsaw University of Life Sciences – SGGW

Link to the original web page of the event 📎

ESARE V – ieif.sggw.pl

You can now see in EUROSTAT the statistics of the European Green Deal.
It is a new interactive visualization tool that shows statistics relevant to the European Green Deal, which is one of the 6 priorities of the European Commission for 2019-24.

This tool aims to help users of European statistics to discover statistical indicators in an attractive and usable way.

It presents an overview of 26 indicators for the EU, Member States and EFTA countries, divided into 3 main themes:

1. Reduce our climate impact;
2. Protect our planet and our health;
3. Enable a green and just transition.

One of the CONSOLE Blog posts this week was about the circular economy. But it was no an accident, since this week, the European Commission has launched a package of proposals aimed at ensuring the transition to a circular economy.

Policy experts welcomed the package and also stress the need for swift action to cut emissions and resource use by EU members.

As Denise Godinho, Communications Director of the European Environmental Bureau, pointed out «after a two-year legal battle against a chemical industry group, the European Commission won ”. And this fact sets an important precedent and opens the door to a more systematic restriction of substances that hinder the circular economy.

Package of proposals

The set of measures of the European Green Deal is made up of:

1. A sustainable products initiative aimed at boosting the circularity of products in the EU market, including a reform of eco-design laws;
2. A strategy for sustainable and circular textiles;
3. A proposal for the revision of the Construction Products Regulation;
4. New rule to reinforce the power of the consumer.

The first measure is complemented by a new legal framework so that almost all physical goods marketed in the EU are more environmentally friendly, adapted to the circular economy and efficient from an energy point of view.

Regarding the second measure, a strategy for textiles was presented by the European Union, with the aim of making them more durable, repairable, reusable and recyclable. All this fight against fast fashion, textile waste and the destruction of unsold products.

The third action aims to stimulate the internal market for construction products and that it meets the criteria for sustainability and climate.

Finally, a package is approved to propose regulations to train consumers towards the ecological transition; so that they are better informed about the environmental sustainability of products.

In short, the European Commission takes a new step so that we all move towards a circular economy in the EU, less dependent on energy and resources; more resistant to external disturbances and respectful of the health of citizens.

Yesterday I was struck by a news carried out Euronews where an exemplary case of circular economy was exposed. It is a “Tool Bookstore” that has been operating in Brussels since 2015 called Tournevie.

Its objective is to rent high quality tools and thereby reduce the purchase of tools for citizens, avoiding the purchase of poor quality tools, and promoting reuse and repair.

Wow! There is no doubt that this news aroused my attention, since it was such an innovative and unique initiative that it had been picked up by the media.

However, we do not have much news related to the circular economy in the media, since it is usually just available in scientific publications.

It was immediately when I thought that news related to the circular economy did not appear too much in the mass media, especially those that are oriented to agriculture, livestock and the environment sustainable..

This information is usually available in scientific publications that few people have access to, both because of its cost and because it uses an excessively technical vocabulary. And, that’s why, I still have the feeling that scientists, technicians as well as politicians are still far from other citizens.

​Beneficial effects for all

As in the case of the “Tool Library“, it would be very interesting to promote publications on circular economy to be adopted and adapted by many communities, create more awareness of sustainable development in the fields of economy and enable unprecedented economic growth. As we will immediately see several examples, local economies would be the best beneficiaries.

And this statement is so true that there are many governments, companies and investors that are placing the circular economy in their efforts to mitigate the negative effects, as is the case of global warming; and how the products will be improved.

Even, as The Baltic Times recently pointed out, alluding to the current war conflict, that the circular economy will reduce dependence on third countries (e.g., energy, raw materials, fertilizers).

​Other examples of circular economy

IIf we search the Internet we can easily find some interesting examples of circular economy related or directly involved in the primary sector.

This may be the case of the company from Almere (Netherlands) MUD JEANS. They have changed the traditional model of “make, buy, use and throw away”. MUD offers their products for rent that users can return when worn out; for the company to repair or recycle. And this is an important issue, since the manufacture of jeans is highly polluting, consuming up to 7,000 litres of water and toxic chemicals.

Appeal, an American company (California, USA), has devised an innovative way to eliminate single-use plastic packaging, while also addressing food waste. Apeel has developed an edible coating layer, made from compounds in the shells, seeds, or pulp, which slows food spoilage.

The contribution to the Circular Economy of SafiOrganics, Kenya, is manufacturing biochar fertilizer developed from discarded rice hulls. The benefits provided by this practice is the improvement of local economies since it avoids volatility and dependence on international markets; increased agricultural yields, lower input costs, creation of local jobs, reduced soil acidity and improved soil structure, as well as increased carbon sequestration in the soil.

And like these we have numerous examples that can be adopted and adapted to their realities by other communities. It would only be necessary to disseminate these circular economic practices of the media and be encouraged by the political leaders of the various administrations.

Recently, we have added a prominent space to the CONSOLE project website so that the Deliverables can be more easily consulted.

Among them, we have uploaded the Deliverable called “Draft framework” which aims to inform about the draft for the provision of AECPG, and where the first solutions are included.

UNIBO is going to show examples of experiences and practices and successful; as well as improved solutions for contractual relationships; and that – in turn – allows managers of agricultural spaces:

• Choosing between possible new contract solutions as alternatives or combinations with the currently dominant practice/action based approaches;
• Design contractual solutions from the preparatory phase to the conclusion of the contract and measure the implementation;
• Consider adding custom recipes.

How has it been done?

A careful analysis of each case study has been carried out, the approaches that coincide with the characteristics of the objective contract have been identified in the conceptual framework of the CONSOLE project. All of this makes it possible to identify initiatives that can help overcome obstacles to the implementation of certain types of innovative contracts.

Subsequently, four main categories were identified, each case study had 4 main points: description of the case study, data/facts of the contract, background information and reasons for success, as shown below (Table 1)

MS	ID	Title	RB/ RO	CO/ COP	VC	LT
AT	AT2	Biodiversity?monitoring?with?farmers	X
AT	AT3	Result‐based Nature Conservation Plan	X
AT	AT4	The Humus Program of the koregio Kaindorf (Carbon market)	X
FI	FI6	Nature value bargaining (Luonnonarvokauppa)	X
FR	FR4	ECO‐METHANE – Rewarding dairy farmers for low GHG emissions in France	X
IRL	IRL2	RBAPS ‐ The Results‐based Agri‐Environment Payment Scheme (RBAPS) Pilot in Ireland	X
IT	IT5	Farmers as Custodian of a Territory	X
LV	LV3	Bauska Nature Park tidy up of territory	X
NL	NL3	Biodiversity monitor for dairy farming	X		X	X
NL	NL4	Biodiversity monitor for ARABLE farming	X		X	X
FR	FR2	Terres de Sources ‐ Public food order in Brittany, France	X		X
DE	DE2	Organic farming for biodiversity	X		X
BE	BE1	Participation of private landowners to the ecological restoration of the Pond area Midden‐Limburg/ the 3watEr project	X	X
BE	BE3	Wildlife Estates Label in Flanders	X	X
BE	BE4	Flemish nature management plan	X	X
DE	DE1	Viticulture on steep slopes creates diversity in the Moselle valley	X	X
DE	DE4	Agro-ecological transition pathways in arable farming	X	X
FR	FR5	HAMSTER – Collective AECM to restore habitats of the European Hamster in Alsace (France)	X	X
IRL	IRL1	BurrenLife Project	X	X
IRL	IRL3	BRIDE ‐ Biodiversity Regeneration in a Dairying Environment	X	X
FI	FI2	Protected areas of private forests as tourism destination	X	X		X
BE	BE2	FLANDERS– Flemish Forest Group		X
DE	DE6	Forest conversion from coniFerous to deciduous stands – an eco‐account case		X
IT	IT1	Incentives for collective reservoirs		X
IT	IT2	Cooperation in Natura 2000 area benefiting biodiversity		X
IT	IT6	Integrated?territorial?projects		X
UK	UK1	Delivering multiple environmental benefits in the South Pennines		X
UK	UK2	Using natural flood management to achieve multiple environmental benefits?in?Wharfedale		X
UK	UK3	Building natural flood management knowledge and capacity in Wensleydale		X
UK	UK4	Natural Flood Management in the River Swale catchment in Yorkshire		X
UK	UK5	Environmental improvement?across a whole catchment: Esk Valley		X
NL	NL1	Kromme Rijn Collective management		X
LV	LV1	NUTRINFLOW		X
LV	LV4	Forest Management		X
PL	PL1	Natural grazing in Podkarpackie Region		X		X
PL	PL2	Program “Sheep Plus”		X		X
FI	FI1	Forest Bank – a forest conservation program in Indiana and Virginia, US		X		X
FI	FI5	Green jointly owned forest ‐ TUOHI		X	X	X
NL	NL2	Green Deal Dutch Soy		X	X
AT	AT1	ALMO – alpine oxen meat from Austria			X
BG	BG2	Organic honey from Stara Planina mountain sites			X
BG	BG3	"The Wild Farm" organic farmers			X
FR	FR3	Esprit Parc National ‐ Food and services in the national park of Guadeloupe			X
PL	PL3	Program “Flowering meadows”			X
PL	PL4	Bio‐Babalscy – Organic Pasta Chain Preserving Old Varieties of Cereals			X
DE	DE5	Water protection bread (Wasserschutzbrot)			X
IT	IT4	“Carta del Mulino” – Barilla			X
ES	ES1	Cooperative rice production in coastal wetlands in Southern Spain			X
ES	ES2	Organic wine in Rueda, Spain (Rueda)			X
ES	ES4	Integrated production in the olive groves			X
FI	FI3	Carbon Market (Hiilipörssi) – a marketplace for the restoration of ditched peatlands		X	X
BG	BG1	Conservation of grasslands and meadows of high natural value through support?for?local?livelihoods				X
BG	BG4	Conservation and restoration of grasslands in Strandzha and Sakra mountains?for?restoring?local?biodiversity?and?endangered?bird?species				X
DE	DE3	Collaboration for sustainability between institutional landowners and tenant farmers				X
FI	FI4	Pasture bank ‐ a platform for pasture leasing				X
FR	FR1	Eco‐grazing ‐ Grazing for ecological grasslands maintenance in the green areas of Brest Metropole				X
IT	IT3	Rewilding of detention basin in Massa Lombarda				X
LV	LV2	DVIETE LIFE				X
*Contract types: RB/RO: Result‐based/result‐oriented contracts; CO/COP: Collective implementation/cooperation; VC: Value chain‐based contracts; LT: Land tenure‐based contracts

Feasibility of new contractual solutions

Work Package 3 was focused on assessing the feasibility, including the acceptability and applicability of innovative contract solutions through surveys involving a wide range of farmers, landowners and other stakeholders.

The acceptability, preferences, technical constraints and economic perception, as well as the likely behavior (and its drivers) on the part of farmers, forest owners and other actors potentially involved in innovative AECPG contracts are being investigated through a collection of secondary data and through aligned/coordinated surveys between the partner countries of the project. The results of these activities are being further evaluated, validated and synthesized through a series of local workshops. The preliminary results will be used as inputs in this document. The final analysis will help design the final framework.

Model Contracts

We call “Model Contracts” those combinations that can be considered for each type of contract based on the most frequent combinations:

Result-based (RB). Based on contracts that specify an outcome rather than the implementation of management measures (e.g., the delivery of a specific AECPG is the subject of the contract and serves as a reference parameter for payment);

Collectives (CO). Based on implementation and/or collective cooperation, farmers and/or public/private landowners voluntarily enter into a joint collective association to achieve a specific objective of the AECPG. That is, they cooperate with each other to achieve a certain objective;

Land Tenure (LT). That is, landowners (private or public) lease their land to farmers, foresters or third parties under certain conditions. These conditions serve to achieve some form of ecological or environmental improvement;

Value Chain (VC). Some contract solutions consider the production of AECPG in relation to the production of private goods. These solutions are motivated by the participation of the entire value chain and the environmental benefits provided by the supplying farms are often part of the marketing strategies of food companies/retailers. Farmers obtain monetary support through financing from market players. In such contracts, producers must meet certain environmental requirements. For example, reduced nitrogen use, higher animal welfare standards, preservation of biodiversity, organic farming.

Hybrid Contracts

The types of contracts do not have to be pure, but different contractual solutions can be combined (hybrids). They are useful tools to reduce risks for farmers, increase collaborative approaches, and provide a multitude of public goods.

Hybrids results-based and collective contracts were the most common form found in the CONSOLE project. For example, the BurrenLife Program (IRL1) is a hybrid case combining results-based and collective approaches, in which participating farmers are rewarded annually for their environmental performance individually and at the same time have access to a common fund to carry out self-appointed projects“conservation support actions” to help improve this performance over time.

Another interesting form of RB/CO hybrid is the joint and several liability contracts that present a collective acceptance of a payment for results. The innovative part lies in the measurement of the result that is carried out on a sample of collective farms (not in each farm) and therefore facilitates monitoring. Very interesting, that hybrid form also allows for economies of scale (a larger collective allows for lower monitoring costs).

Recommendations

We recommend that you consult the contract models and their characteristics by downloading the deliverable; but you can also check the characteristics of the payments and the duration of the contracts (benefits, disadvantages, examples, etc.), supervision and compliance, sanctions or conditions of participation.

But, in addition, in section 6 you can consult the “Design Guide” of decision trees for types of innovative contracts.