Payment calculations and controls

For those of you who could not join the RBAPS conference in Brussels last month and for those who did and have more to say, we would like to encourage your contributions to the discussion on these 3 topics:

  • – setting biodiversity objectives and determining results indicators
  • – calculating payment rates, verification and controls
  • – identifying what works from a farmers’ perspective

Here is your chance to add to discussions about calculating payment rates, verification and controls, an area which has been the subject of much discussion and confusion over the years.

What is the legal and policy framework?

Before getting into the discussion that took place at the conference let’s look at some of the basics about payment calculations.

When calculating payment levels for any agri-environment scheme authorities need to follow Article 28.6 of the EAFRD regulation (1305/2013) which requires that payments compensate beneficiaries for all or part of the additional costs and income foregone resulting from the commitments made, with up to an additional 20 per cent of the calculated premium (30 per cent for group applications) available for transaction costs. If necessary, an amount should be deducted from agri-environment-climate payments to exclude double funding of practices required under the ‘greening’ conditions applied to direct payments.

When calculating results-based payments, the European Commission advises that payments ‘should be based on the additional costs incurred and income foregone as a result of the farming practices which are in general necessary to achieve the results expected from these commitments.’ There are broadly three types of cost to be considered:

  • – the opportunity cost of maintaining current management where this already provides the biodiversity results;
  • – the income foregone by modifying management to improve biodiversity results that also reduces agricultural production from the land; and
  • – the additional costs of specific biodiversity management.

In terms of verifying results-based payments, the European Commission states that the measuring and control of results-based payment schemes should relate to the ‘delivery of the expected results and not the practices undertaken by the beneficiary to achieve these results’.

For schemes run under EAFRD rules for 2014-20 the basic principle for results-based schemes is that the payment controls verify that the result indicators have been achieved, using the methodology specified in the contract. The ability to verify results is therefore a major factor in selecting results indicators, setting result thresholds and designing measurement protocols – as discussed here.

The use of auctions or tendering processes is an alternative approach for determining payments. Although potentially useful for setting payments in the first instance, particularly in homogenous landscapes, participants at the conference noted that experience suggests that auctions can result in a ‘race to the bottom’ as farmers quickly learn how to bid. To mitigate such a risk, participants proposed that an auction approach would need to focus on maximising the quality of the output rather than cost minimisation. Questions were also raised about the applicability of auctions for heterogeneous situations across different landscapes and farming systems.

There was a lively discussion at the conference on how to make results-based payments attractive to farmers and what are the important elements in the design of verification and control systems. Highlights from the discussion are captured here:

How to make results-based payments attractive to farmers?

Key to the discussion around payments at the conference was how to make payments for results attractive to farmers and what issues should be considered. Suggestions included:

  • – Encouraging Member States to include farmers’ transaction costs within the payment calculation.
  • – Including the farmers’ costs of planning and control in the payment – either as a transaction cost or in the main calculation.
  • – Ensuring that the payment is attractive compared to alternative CAP schemes.
  • – Emphasising the quality of the outcome and not just the cost.
  • – Offering options within the scheme to include payments for non-productive investments where biodiversity investments are needed, such as habitat restoration.

What are the important elements in the design of verification and control systems according to participants?

It is important to remember that the measuring and control of results-based payment schemes should relate to the ‘delivery of the expected results and not the practices undertaken by the beneficiary to achieve these results’. Important elements identified include:

  • – Time control inspections to individual farms to ensure results indicators are measurable.
  • – Ensure that the controls are uncoupled from the payment calculation.
  • – Encourage self-assessment, for example by providing farmers with good documentation with photos of results indicators such as flowers.
  • – Remember that self-assessment is additional to formal controls and can be important to facilitate farmers’ understanding of the control methodology. Self-assessment is not a replacement for formal controls.
  • – Remote sensing can be beneficial but is not a solution everywhere – for example, field visits are required for semi-natural vegetation and extensively managed land.

FR RBAPS species ID tool

What other factors might be important to farmers? What other elements might be important for checking and controlling payments? please post your ideas below.

Sharing agri-environment knowledge

Results-based agri-environment schemes – a new project to share knowledge

This project – initiated and funded by the European Parliament and managed by DG Environment – brings together information and experiences from across the EU and beyond on agri-environment type schemes that have been designed to focus on paying farmers, other land managers or local communities for the biodiversity results they deliver. A number of different ways of going about this have been trialled in different countries and these are brought together in an online inventory, explaining their aims, the way they work and what they have achieved so far. In reviewing these schemes, the research team have spoken with many farmers as well as the people who designed and implement the schemes to find out their main benefits and where they are appropriate and where not as well. Key factors of success and barriers to implementation have also been identified.

The project is generating a range of materials to help those interested in developing results-based agri-environment schemes. You will be able to find a practical handbook providing guidelines on how to go about designing a results-based scheme, from design to implementation to monitoring and evaluation. A series of videos have been produced to demonstrate how these types of schemes are operating in different countries, showing examples of good practice and including views from farmers and those running the schemes.

On 23-24 September a conference will be held in Brussels to showcase the range of results-based schemes already existing in the EU and to discuss ways that this type of approach might become more widespread in the future. Information on this and all presentations will also be available on our web platform.

If you are interested in results-based approaches for delivering biodiversity outcomes, already involved in a scheme or thinking about developing one, we would love to hear from you. Please join our community by contributing to this blog and/or visiting our platform. You might also let us know if there is anything additional you would like to see on this site? If you are still a little confused about how these schemes differ from other agri-environment schemes read the next blog post which should shed some light on this.

Welcome to our Blog

Exchanging information and practical experience on payments for biodiversity achievements in agriculture

Find out about the latest thinking on existing results-based agri-environment schemes, their design, implementation and monitoring. Hear what practitioners have to say and exchange views on how to design and implement schemes in different parts of the EU. Register to receive updates and the latest research findings and to comment on posts.

Across Europe, agri-environment schemes provide important sources of funding to farmers to protect wildlife habitats on agricultural land. Results-based agri-environment payment schemes focus on paying farmers for the biodiversity outcomes that are achieved rather than rewarding them for specific management actions. This Blog has been created to exchange information and practical experiences on these approaches. It offers a platform on which findings and reflections from a research project can be shared. The project is managed by DG Environment; it was initiated and is funded by the European Parliament.

Want to know more about these schemes then read our blog posts or visit the web platform