H2020 Contracts2.0 Project: Co-design of new contract models for innovative agro-environmental and climate measures and for the valorization of environmental public goods.

Incentivizing Farmers to Adopt Greener Farming The environmental benefits of farming can be increased by transforming current practices. The EU-funded Contracts2.0 project developed a series of agricultural approaches that balance productivity with sustainability. A shift in agriculture could help mitigate the impacts of two major ongoing crises: climate change and biodiversity decline. Currently, farmers can participate in agroecology and climate programs and receive financial compensation for their efforts to implement conservation measures on their land.

However, effective implementation and monitoring of these programs can be complex, hindering their widespread adoption by farmers across the EU. “Current programs are often inflexible and don’t consider the reality of geographical differences,” explains Bettina Matzdorf, a social scientist at the Leibniz Centre for Agricultural Landscape Research and coordinator of the Contracts2.0 project (Co-design of new contract models for innovative agri-environment-climate measures and for the valorization of environmental public goods). She adds: “New contracts offering payments for results, which encourage farmers to collaborate, could better incentivize them to produce not only agricultural products, but also biodiversity and other ecosystem services.” Landscape-scale solutions The EU-funded Contracts2.0 project developed innovative approaches to make these programs more effective and attractive to farmers. The overall idea was to incentivize farmers to produce more environmental public goods: non-exclusive, non-fungible products, such as attractive landscapes. The Contracts2.0 team wanted to discover which contract models improve the provision of these environmental public goods while enabling economically viable agricultural production. “Solutions for many of our biodiversity, water, and climate goals must be implemented at the landscape scale,” says Matzdorf. To determine which approaches might work best, the team examined various collective and results-based agri-environment climate programs.

They also considered land tenure approaches, as well as exploring ideas further up the value chain, such as certificate-based private payment programs. “We analyzed existing examples across Europe, tested new contract designs in economic experiments, and jointly developed solutions on the ground,” Matzdorf notes. The team also investigated the political framework conditions required for implementing new programs in nine EU countries. Creating Innovation on the Field and Online The Contracts2.0 project created 11 Contract Innovation Labs across Europe, bringing together farmers, scientists, and environmental experts to develop new and viable solutions that could be incorporated into contracts. These were complemented by Policy Labs, which specifically brought together policymakers to develop appropriate policy frameworks. Starting in 2019, the team conducted a series of field visits to foster knowledge sharing, showcase examples of good practice, and make the approaches and objectives tangible.

"The professionals emphasized the importance of learning from each other. The visits facilitated exchanges between stakeholders from different laboratories, but we also participated as researchers," says Matzdorf. During the pandemic, the team had to replace in-person workshops with virtual events on agroecological topics. The online format, free access, and the participation of invited experts facilitated the workshops' great success. Matzdorf emphasizes that the collaboration between agricultural practices, policies, and science in many European countries made it possible to consider a wide variety of circumstances, types of agriculture, landscapes, and political environments. "I think we have made progress toward better contracts for agriculture and nature," he comments. The project also produced a catalog of factors that facilitate and hinder existing approaches, and a guide for a policy framework that encourages contractual approaches and the development of appropriate agri-environment and climate policies.