The New Eco‐Schemes: Navigating a Narrow Fairway

This article highlights some key challenges and trade‐offs with which national policy designers have to contend in devising national eco‐schemes for agriculture. We show that policy designers operate in a narrow design space which is constrained by various political and legal requirements. One key challenge is to design a reward system that allows the uptake of eco‐schemes by farmers to be aligned with a given budget. We present four broad implementation models for eco‐schemes and discuss their merits and shortcomings in light of stipulated requirements. These are the 'greening model', the 'modified greening model', the 'eco‐points model' and the 'AECS model' in the style of the agri‐environmental and climate schemes of CAP Pillar 2. We conclude that the eco‐points model is likely to be the most suitable. By stipulating that individual farmers must reach a certain minimum number of points per hectare (eligibility threshold), but are not entitled to payments for points that exceed a certain upper limit per hectare (cut‐off), it allows demand from farmers for inclusion in a scheme to be steered such that aggregate uptake coincides with the budget; thereby reducing the risk of over‐ or under‐subscription while maintaining flexibility to cater for heterogeneity in site conditions.