Danish landowners prefer higher compensation for restrictive agri-environment schemes

What the study found: Danish landowners asked for higher compensation when agri-environment schemes required giving up direct subsidy payments and hunting rights. The study also found that compensation needs were higher for longer temporary commitments and for rewetting commitments in permanent schemes.
Why the authors say this matters: The authors conclude that comparing implied discount rates from the choice experiment with current Danish agri-environment schemes shows a policy design misalignment. They suggest current policy favors flexible annual payments, while the societal benefits from permanent schemes are arguably higher.
What the researchers tested: The researchers used a choice experiment, a survey method that asks people to choose between hypothetical options, to compare Danish landowners' preferences for temporary and permanent agri-environmental and climate schemes. They examined two land set-aside contracts: temporary contracts with annual payments and permanent contracts with a lump-sum payment.
What worked and what didn't: Landowners required higher compensation under both temporary and permanent set-aside schemes when direct subsidy payments and hunting rights were removed. Common Agricultural Policy direct payments were valued lower when a permanent contract included an agricultural activity requirement than when it did not. The average implied discount rate was 3.3%–3.4% for schemes matching actual Danish annual and lump-sum permanent offers, compared with 1.9%–2.1% for the choice experiment schemes.
What to keep in mind: The abstract does not describe detailed limitations beyond the comparison being based on hypothetical choice experiment schemes and current Danish agri-environment schemes. The study is focused on Danish landowners, so the findings are specific to that context.

Key points

• Landowners wanted higher compensation when schemes required giving up direct subsidy payments and hunting rights.
• Longer temporary commitments and rewetting commitments in permanent schemes increased compensation requirements.
• A permanent contract with an agricultural activity requirement reduced the value of CAP direct payments compared with no such requirement.
• The implied discount rates differed between current Danish schemes and the choice experiment schemes.
• The authors say the comparison suggests a misalignment between current policy design and the higher benefits of permanent schemes.