320 Political science 630 Agriculture, Veterinary medicine
Managed grasslands contribute in a number of ways to the biodiversity of European agricultural
landscapes and provide a wide range of ecosystem services that are also of socio-economic value.
Against the background of a rapid biodiversity loss in agricultural landscapes, increasing
attention is being paid to farming practices that enhance ecosystem services. Therefore
developing cost-effective conservation payment schemes is the main challenge facing present
European agri-environmental policy. However, there is still a serve shortage of knowledge and
practical experiences concerning the use of conservation procurement auctions in Europe.
The aim of the paper, therefore, is twofold. Firstly, the current state of using markets for
biodiversity by means of payment-by-results biodiversity conservation procurement auctions will
be discussed by reviewing two field experiments with farmers in two case-study areas in
Germany. Secondly, further need for research will be discussed briefly.
Keeping in mind the methodological difficulties of evaluating field experiments, this empirical
work indicates a potential for budgetary cost advantages of auctioning compared to traditional
fixed flat-rate payment schemes of up to 52 per cent. These findings along with the relatively
high number of successful participants indicate that this specific approach will most probably be
an improvement over current agri-environmental programmes in the EU. This is mainly because
low-cost producers gain smaller information rents and conservation agencies will be able to close
contracts with (some) high-cost farmers due to cost-effectiveness gains provided by low-cost
Even though the case-studies have yielded promising results, some critical aspects as well as
lessons to be learnt will be discussed to improve the design and performance of upcoming
biodiversity conservation procurement auctions based on performance payments. Current need
for research addressed in the paper takes deals with the design of a specific agri-environment
index for plant biodiversity.
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