Agriculture and Climate Change: Evidence on Influencing Farmer Behaviours

7. Factors Influencing Farmers' Uptake of Policy Measures

7.1 Introduction

The literature indicates that, in addition to personal and farm characteristics, factors such as cost issues, the relationship between farmers and policy makers and retail pressure have an impact on farmers' uptake of environmental policy measures. These issues are discussed in the sections that follow and the perspectives of opinion formers are brought in where relevant to provide a current, Scottish focus. The chapter then considers collaborative approaches to the implementation of mitigation measures, on the basis that policy designed for the single farm is not always the most effective approach for achieving wider environmental targets.

7.2 Cost issues

Many mitigation options entail additional costs to farmers, both in terms of capital outlay and in the time taken to acquire new skills, new equipment, new practices etc.

Investment costs

Some mitigation options carry large investment costs (in particular for new animal housing and manure management systems). Obtaining finance for this may be difficult, if the revenue obtained is uncertain (Smith and Oleson, 2010).

While the installation costs of on-farm anaerobic digesters (for example) may be offset by grants and low interest loans, operating costs must be covered by income generation. Smaller farms are likely to be less willing to tolerate these costs than larger businesses, so adoption rates could be influenced by the size of the farm (RELU, 2011).

The evidence also highlights issues of uncertainty. For example, the improved efficiency of a new grain drier may take several years to justify the expense, and meanwhile the new technology often becomes cheaper. So it is a balance of risks depending both on financial circumstances and the uncertainty of future weather patterns. Similarly, the payback time for investing in renewable energy is not guaranteed because of factors like bank interest rates, realised wind speed and future government policy to further incentivise such actions (Dick et al, 2010).

Transaction costs

Transaction costs are an important element of the implementation of agricultural policy measures. A useful paper (Ridier et al, 2008) summarises the issues in relation to cross compliance and agri-environmental schemes (AESs). Transaction costs fall both to farmers (private) and to the state and public service agencies (public). Public transaction costs may be classified into two categories:

• Fixed costs, linked to the system's design, implementation and evaluation
• Variable costs, linked to the system's running, such as the examination, supervising, monitoring and payment of contracts.

Fixed costs arise only once per programme, and economies of scale as well as learning effects might be realised, due to information and knowledge gathering. Variable costs depend on the number of hectares or the number of sites.

Private transaction costs (borne by the farmers themselves) may be broadly defined as relating to:

• Information costs: time and expenses necessary to gather information regarding contracts proposed; or new regulations and modes of enforcement of cross compliance measures
• Administrative costs: time spent in recording practices, filling in CAP forms and other administrative tasks; hardware costs; possible time spent on software training
• Organisational costs: time and expenses entailed to comply with new measures (change in practices, need for technical support, organisation of 'in-farm' administrative tasks, monitoring tasks etc).

There are several reasons why measuring transaction costs is difficult:

• There is no standard terminology on transaction costs
• It is difficult to separate transaction costs from production costs
• If transaction costs are high, most transactions would not even take place
• Different actors may face different transaction costs.

Few studies have assessed farmers' attitudes towards the mechanisms of scheme implementation. Research by Falconer (2000) reported findings from a pan-Europe survey to determine the causes of participation and non-participation of farmers in the agri-environmental programme in eight EU member states. Responses in relation to non-participation covered a range of issues, but the three main reasons were:

• 'didn't know enough about scheme'
• 'compensation is too low'
• 'application is too costly.'

More recently, Manley and Smith (2007) surveyed participants and non-participants in agri-environment schemes in Scotland, to explore views and reasons for joining/not joining. The survey was carried out in 2004, and related to environmental schemes operating at the time, but the issues are likely to remain relevant. A total of 353 non-participants responded to the survey, offering a range of reasons for their non-participation. A general antipathy and concern was expressed in relation to paperwork and general interference, as well as perceptions of hidden costs and lack of certainty whether payments would cover costs.

Research by Weber (2011) investigated why farmers spend different amounts of transaction costs in different agri-environment schemes. Although the research itself relates to schemes operating in Germany, and so specific findings may not be useful to policy makers in Scotland, results are interesting because they relate to actual behaviours in relation to transaction costs, rather than perceptions about their nature and burden. Findings show that the decision by farmers to commit to activities incurring transaction costs stems from several motives and varies along the transaction process. For example, farmers who participate due to an interest in nature conservation tend to spend more on transaction costs at every stage of scheme delivery. Farmers who manage large farms, organic farms, and/or run their farms full-time, and those who have a long-term business horizon, spend more effort on information gathering. Willingness to spend money on information is also connected with the amount of schooling and training farmers have received: people who are more educated are likely to be more interested in information on further management options. Farmers who participate due to financial interest tend to spend more effort on contract implementation.

Consequently, variation in private transaction costs may be the result of a range of different underlying factors, including famers' motives, and different motives may be prevalent at the various stages of scheme participation. Results also show that the actual amount of transaction costs may not be the most important factor in deciding scheme participation, as a large part of transaction costs may be spent voluntarily in order to realise gains from transaction (Weber, 2011).

Transaction costs: messages from the opinion former interviews:

Opinion formers highlighted a range of perceptions of transaction costs across the various climate change mitigation initiatives operating in Scotland:

• The Farming For a Better Climate five key actions were not seen to be associated with much paperwork. However, preparing to adopt the actions was considered to require quite a bit of time (assessing the quality of the soil, for example), and the assistance of an agricultural consultant, which costs money.
• In relation to renewables, bureaucracy associated with the planning process was repeatedly highlighted as an issue.
• Paperwork was seen to be an issue when applying for funding through SRDP schemes. The forms were said (by interviewees) to be so complicated that filling them in required an agricultural consultant. However, one person suggested that those who have actually taken up Rural Priorities measures consider the transaction costs to be minimal.

7.3 Relationship between farmers and policy makers

This section discusses two major areas where the evidence highlights tensions in the relationship between farmers and policy makers, which may have wider implications for the uptake of climate change mitigation measures.

Farmer perspectives on environmental responsibility

A theme throughout the literature is that virtually all farmers identify their first priority as the profitability of the farm business, rather than maintaining the environment per se. Research by Davies et al (2004) which included interviews with a small number of Scottish farmers and other stakeholders involved in land management policies, confirmed that farmers are focused on the 'bottom line,' rather than providing public goods such as biodiversity, water quality and landscape amenity. This has already been noted in several previous chapters, as it underpins the evidence base in relation to attitudes and culture, as well as uptake of policy measures. Naturally it also has implications for how environmental policies are 'sold' to farmers.

However, the research by Davies et al also identified that some innovative farmers were keen to make a strong case for their role as stewards of the landscape. They pointed out that the very landscape that agencies and NGOs seek to protect has been created and nurtured through their tradition of farming practices. They felt frustrated that, in their view, many of the conservation lobby did not recognise or respect the crucial relationship between responsible farming and the provision of public goods.

The research also investigated farmers' perceptions of their role in tackling environmental problems. Findings indicated that farmers often felt unfairly singled out as the culprits. Where problems were recognised, farmers argued that other factors (such as septic tanks and water treatment plants) often contributed to water pollution, but that this was not acknowledged. Other farmers interviewed felt the emphasis on farmers having to provide public goods at their own private cost was unfair. They contrasted their situation with other industry sectors, such as tourism, which they perceived as 'focusing on profitability without an expectation of maintaining the landscape and environmental quality.' The authors suggested that sharing the responsibility more widely would give positive impetus to more partnership-based approaches for management that look to forge greater links between these diverse stakeholders (Davies et al, 2004).

In other relatively recent work in Scotland, Macgregor and Warren (2006) undertook face-to-face semi-structured interviews with 30 farmers in the Eden catchment of Fife. The research was undertaken prior to the introduction of NVZ measures, in an attempt to ascertain how farmers regard environmental legislation as well as what motivates them to adopt environmentally sustainable practices. As the sample was specifically drawn from farmers who would be subject to NVZ measures, it is not necessarily comparable to the farmers who participated in the research by Davies et al. None of the Eden catchment farmers felt responsible for environmental problems either on or off their farms, and when questioned about potential environmental issues, the focus was on on-farm issues such as soil erosion, sub-soil compaction, soil structure decline and wind erosion. Rather than accepting the connection between their farm practices and river nutrient levels, they blamed point source polluters. Although some off-farm concerns were mentioned, the authors argued that most farmers were merely 'paying lip-service.' For example, none of the interview participants mentioned the health of the estuary as a concern despite the fact it was specifically mentioned in multiple questions (Macgregor and Warren, 2006).

Farmers' disassociation from the impacts of their behaviour does not necessarily prevent them from adopting environmental measures. In Macgregor and Warrens' work, although farmers did not accept responsibility for the off-site environmental problems, they made it clear that they would change their practices if they had to (although the implication was that this would require regulation rather than voluntary measures).

In addition to general feelings of victimisation, some farmers feel that specific policies discriminate against particular groups of farmers. For example, as noted earlier (Chapter 5) many farmers in Scottish NVZ areas feel a sense of injustice. This is particularly acute because in other European member states (such as Denmark), a nation-wide approach has spread the regulations across all farmers equally, regardless of the nitrate pollution in specific regions, whereas in Scotland, a regional approach focuses on the most affected areas. There is resentment about farmers who do not face the same legislation and a widespread feeling that other industries and consumers should share these costs. Such feelings of resentment are likely to spill over and influence farmer attitudes in other areas.

Farmer endorsement of agricultural policy

Policy endorsement is important in three main respects. Davies and Hodge (2006) summarised previous research which shows that:

• People are more likely to abide by regulation when they believe it to be appropriate, fair, equitable in implementation, efficient/effective in process, proportionate, relevant and necessary. The introduction of regulation when these factors are absent may lead to widespread transgressions, entailing high monitoring and enforcement costs
• The imposition of regulations which do not coincide with commonly held values among the target population can have 'spillover' effects on the attitudes of people towards governance in related areas. These spillover effects can entail a withdrawal of goodwill, the development of an adversarial rather than cooperative approach to the achievement of other objectives, and exacerbate regulatory problems in other areas.

At present, there is scepticism regarding the evidential basis of policies such as NVZ regulations. Macgregor and Warren (2006) found that most, if not all, the farmers they interviewed exhibited 'strong antipathy' towards government-associated initiatives, whether regulations or funding opportunities, which may relate to their feelings of victimisation in relation to NVZ designation.

Davies and Hodge (2006) noted that a key issue in developing appropriate agri-environmental polices, is understanding the extent to which the principles of policy are endorsed by farmers, and which factors may contribute to that endorsement. They highlighted that past studies on adoption of environmental management practices have identified three broad factors as important:

• Opportunity - a farm structural issue
• Inclination - a farmer attitudinal issue
• Incentive - a scheme design issue.

From their review of the literature and a small primary research project, Davies and Hodge concluded that farmers may endorse a policy that is not strictly speaking in their own economic interest, if they feel it is 'appropriate;' and, likewise, not support a policy even if it is in their interests, if it runs contrary to a normative standard.

The importance of developing policy in consultation and cooperation with the farming industry is widely recognised by government agencies. Furthermore, as Davies and Hodge point out, a key issue in developing appropriate agri-environmental policies is understanding the extent to which the principles of policy are endorsed by farmers, and which factors contribute to that endorsement.

The burden that particular policy measures place on farmers is also an important factor in whether policies are endorsed. Recent work that looked at regulatory burdens noted that farmers can feel constant pressure to keep up to date with a broad range of changing regulatory requirements. This can be a cause of stress, particularly for those who manage alone and struggle to find time to read and understand each new or changed regulatory requirement. They worry that they 'will miss something important' which could result in a reduction in payments or even prosecution. This anxiety, and feeling of 'guilt' can be compounded by heavy-handed or insensitive enforcement (Report of the Independent Farming Regulation Task Force, 2011).

Increasing uptake of policy measures: messages from the opinion formers interviews

Interviewees highlighted a number of potential levers in relation to uptake. Some of these related to specific initiatives, or farmer characteristics, and are discussed in other parts of the report. However, a number of levers mentioned had broader potential impacts and are included here.

Ease of implementation

This was seen to a particularly influential lever. Interviewees emphasised that for substantial numbers of farmers to adopt a measure, it must work and not require too much disruption to existing farm management systems. It was suggested that farmers do not mind making minor adjustments to their management practices, if these are 'low-hanging fruit'. However. even those measures that are considered to be 'win/win,' i.e. good for the environment and for profitability, will not necessarily be adopted if they are seen to be too difficult to implement. The importance of ease of implementation was particularly highlighted by SAC interviewees, from their experience as hosts of Farming for a Better Climate.

A number of interviewees stated that seeding clover in grazing pastures to enrich soil and feed livestock is an example of a measure that is practical, easy to implement and help reduce fertiliser costs.

Incentivising measures

Providing greater financial incentives was considered to play an important role in increasing farmers' uptake of mitigation measures. Without the possibility of a new or increased revenue stream, most farmers do not have the time/money to implement new methods. Opinion formers felt that there was a particular need for capital incentives for measures such as renewables, which require large initial costs to be recouped before profits can be made.

Although financial incentives were one of the most commonly mentioned suggestions to improve uptake of mitigation measures, interviewees acknowledged that this was just one option amongst many and 'we can't incentivise everything'. Furthermore, it was suggested that, if methods are simply utilised because of the monetary rewards and there is no 'buy-in', farmers may revert to their previous behaviours when the initiatives end. Consequently, it is important to convince farmers that climate change mitigation measures are beneficial in their own right.

Simplifying processes

The importance of simplifying existing processes was noted, as well as ensuring legislation and funding are joined up. The planning system in particular was seen to be a major obstacle to more widespread use of wind turbines. There is a strong desire amongst farmers for more consistent planning processes that are easier and less time-consuming to negotiate. The view was also expressed that regulations get in the way of hydro power generation, and that there is a need for joined-up environmental legislation.

One interviewee noted that if a farmer installs a crossing on a burn to reduce pollution by speeding transit of cattle, this requires controlled activities regulations (because you are creating a ford) when such behaviour should be encouraged. It was suggested that the Land Use Strategy could, potentially, help to address these issues.

Setting Clear Targets

Many of the opinion formers felt that farmers need clearer information about what is expected of them. If there is a target to aim for, it is much easier for them to work towards it, especially if penalties for failing to do so are well advertised and consistently enforced. It was suggested that, if the agriculture industry was to be told: 'if you haven't reduced your emissions by x in five years' time, the voluntary measures will become compulsory,' farmers would give more consideration to the measures.

'Councils have targets and face sanctions if they do not deliver, why should the agricultural industry be any different?'

Greater flexibility

In general, opinion formers considered that farmers would be more likely to adopt mitigation measures if the rules and processes were less rigid and could be 'tweaked' to meet their unique circumstances. This was particularly seen to be the case with the less flexible requirements of SRDP initiatives. Farmers know their own land better than anyone else so policy makers should take advantage of this expertise. If farmers were set a goal and allowed to meet it in the manner that they felt was most appropriate for their farm, it would encourage innovation and could become something that they take pride in. Farmers would be more likely to think of something 'workable' and 'practical' which could be adopted by others.

Currently, farmers may have no choice but to act in a way that they believe has negative effects in terms of production and/or environmental impact. Being compelled to implement sub-optimal impacts is likely to have negative effects on farmers' attitudes towards agricultural policy more generally.

Although greater flexibility was widely considered to be positive, a few reservations were highlighted:

• If farmers reduce emissions by using a variety of different processes, it could be very difficult to monitor and assess whether they are getting the results that they claim
• Giving farmers more flexibility to use their initiative increases the likelihood of unintended consequences and, possibly, swapping one form of pollution for another.
• Not all farmers appreciate flexibility. Some would rather receive clear instructions. Thus, farmers should be given the option, not the obligation, to innovate.

Other suggestions to increase uptake of mitigation measures

• Establishment of a climate change award to promote the practice of high achievers
• Greater cooperation between farmers encouraged in the raising of capital and locating of wind farms
• A tractor scrapage scheme to encourage the purchase of newer, more fuel efficient machines and/or putting a meter on existing fuel tanks to ensure that farmers are aware of their fuel consumption.

7.4 Retail standards

The potential role of supermarkets to influence farmer behaviours was a recurrent theme of the interviews with opinion formers (see below). However, there appears to be little in the literature about that role, a finding that was endorsed by the peer reviewers of this report. One study which reviewed the pressures and drivers encouraging and hindering reduction in net GHG emission in agriculture (Dick et al, 2010) noted that all major UK supermarkets are currently promoting low carbon products and encouraging producers to calculate the GHG emissions of their products. Naturally this sends out a strong message to farmers about how their businesses should be structured and monitored. The research noted that retailers in the UK commonly report using PAS2050 (Publicly Available Specification 2050: Specification for the assessment of life cycle greenhouse gas emissions of goods and services: http://www.bsi-global.com. However, the researchers found that data availability and transparency are major issues with implementing PAS2050. Commonly in the UK, the data provider is the farmer, who is not explicitly paid for providing these data. Instead of direct payments, secondary benefits are used to persuade the data provider to deliver data; for example: marketing advantage, protection of existing markets, identification of cost saving or efficiency improvement opportunities. The researchers could find no evidence that the sources and data used were verified in a robust manner.

Increasing uptake of policy measures - the role of supermarkets and the private sector more generally: messages from the opinion formers interviews

Opinion formers suggested that supermarkets have the potential to be a major influence on farmer behaviours. They are in a position to work with suppliers to raise environmental standards, as well as being well placed to influence consumer behaviour. However, interviewees raised several concerns about the prospect of greater supermarket influence:

• It will be harder to influence the behaviour of the many smaller farms who get less business from supermarkets, and have less to gain from changing their practices, especially if they do not feel connected to the issue.
• If supermarkets insist on more stringent environmental targets in the future, will the additional financial burden fall on farmers, consumers or the supermarkets?
• There was concern about the likelihood of supermarkets insisting on carbon footprinting in future. The science behind carbon footprinting was not felt to be sufficiently robust and many farmers consider it to be simply 'box-ticking'.

Interviewees felt that there is currently little awareness of private sector schemes amongst farmers and, although there has been talk about the greater role that supermarkets (in particular)could play, this has rarely led to tangible actions on the ground. They did, however, provide two examples of relevant private initiatives.

• Morrisons launched a farming programme in June 2009, focused on research to help improve the efficiency and sustainability of British farming, in partnership with agricultural colleges and the National Farmers Union. The programme comprises three key elements: driving efficiency, by helping farmers to access best practice; supply chain dialogue, to encourage working across the supply chain, with the launch of Farmer Groups for dairy, beef, poultry and egg farmers; investment in applied farm research organised through Morrisons Farmer Groups.

Morrisons also established a research farm on the Dumfries House Estate in East Ayrshire. The aim is to be become a leading centre of excellence for farming research, working in partnership with the Scottish Agricultural College to drive research into sustainable farming models and share best practice throughout the industry, with the support of the National Farmers Union Scotland (NFUS): http://www.morrisons.co.uk/Corporate-Old2/Press-office/Corporate-releases/Morrisons-launches-farming-programme/

• The Cadbury Dairy Guide to Low Carbon Dairy Farming was launched in February 2009, working in partnership with farmers to reduce the environmental impact of dairy farming. The Guide provides an overview of the factors that contribute to carbon emissions from dairy farming and provides practical suggestions that farmers can implement to reduce the carbon footprint of milk production.

7.5 Relationships between farmers

Although it is important to influence the behaviour of individual farmers, there is now widespread recognition that emphasis on policy designed for the single farm is not always the most effective approach for achieving desired environmental quality targets. Engagement in collaborative activities can be defined along a spectrum from individual to collective. At the individualistic end of the spectrum, farm actions are focused within a single farm boundary and without reference to wider objectives. At the other end of the spectrum lies full community land ownership, under which the entire decision-making process involves collective action. In between, joint boundary management; coordinated timing of operations; machinery and labour exchange; landscape scale planning; cooperative marketing; co-investment and financing; and joint business ownership provide a range of opportunities and challenges (Davies, 2006).

Interviews with a small sample of farmers in the Grampian region of Scotland investigated the relationship between labour and resource exchange and social capital (Sutherland and Burton, 2011). The study noted that farm equipment is potentially a key area of exchange in farming communities. As the price of machinery increases, the likelihood that smaller farms have the economies of scale to support expensive machinery declines, providing an opportunity for potential savings through cooperative action. The study found that farmers would usually only loan out expensive machinery to other family members, or to neighbours in an emergency (as long as there was a history of positive interactions with those neighbours). In addition, and interestingly from a cultural capital perspective, farmers in the study identified neighbours with whom they would not share machinery, on the basis of an observed lack of farming skills, even when such skills were apparently unrelated to machinery use (Sutherland and Burton, 2011).

Farmers who participated in the Sutherland and Burton research also commonly employed formalised machinery sharing systems: 'Machinery Rings,' whereby access to contractors (equipment and labour) is centrally organised by an administrative body. In these arrangements, there are no benefits to be gained from possessing higher levels of social or cultural capital, because transactions are reduced completely to economic capital. However, larger farmers were seen to be receiving favourable treatment, and it was perceived that smaller scale farmers might not have sufficient acreage for it to be worthwhile for Machinery Ring contractors to travel. The research concluded that, although small-scale farmers could be expected to benefit the most from the machinery ring, owing to their inability to afford large pieces of machinery, they are not best placed to draw on the service, particularly if they are located in a remote area (Sutherland and Burton, 2011).

A review of the literature carried out as part of a major study in Scotland (Davies et al, 2004) noted that a number of environmental goods and services demanded of agriculture are very difficult to provide without collective action on the part of farmers and other stakeholders. Key reasons why cooperation is needed for the provision of environmental benefits include the following:

• Solve dilemmas caused by the positive or negative externalities associated with public goods
• Allow management at an ecologically appropriate scale, across legal and administrative boundaries
• Increase the cost-effectiveness and economic feasibility of providing environmental goods and services
• Facilitate the harmonisation of multiple objectives for resources
• Share knowledge and information - it is rare for one party to hold all the necessary information and expertise for solving an environmental problem
• Share and mobilise resources
• Increase credibility and legitimacy in decision making
• Allow greater flexibility, responsiveness and local relevance
• Build understanding and capacity to cope with future changes.

Farmers are generally considered to strongly value their independence. This would imply that they are unlikely to be in favour of collective actions. However, there have been a number of successful instances of farmer cooperation such as the spread of formal Machinery Rings and numerous marketing and buying cooperatives in Scotland. Members of some farming traditions, such as crofting, generally view collective action more favourably and there is some regional variation as well, with stronger traditions of cooperation in hill farming areas as opposed to lowland areas where farmers are arguably more individualistic (Davies et al, 2004).

Farmer perspectives, gathered during a series of interviews and focus groups as part of the research by Davies et al, indicated that spontaneous, farmer-led, cooperation for purely environmental outcomes is extremely unlikely. However, farmers are prepared to cooperate in certain situations, given sufficient incentives and the removal of barriers to collective action. The incentives and barriers for cooperation, as defined by farmers, are summarised below.

Incentives

Barriers

• Income generation
• Cost-reduction or sharing
• Risk mitigation
• Access to advice and grants
• Gaining a voice in the policy process
• Improved ease of management
• Solving of perceived problems (such as diffuse pollution)
• Complex bureaucracy for funding and advice
• Policies disadvantaging groups over individuals
• Conflicting messages and inability to plan reliably given shifting policies
• Inflexible and constraining conditions for schemes
• Lack of time
• Lack of knowledge or awareness of extension personnel
• Suspicion of partner organisations' agendas
• Poor relationships or lack of access to facilitator/project officer
• Preference to work independently where possible

The report made 21 specific recommendations, based on key findings. These related to:

• Broadening the role of farm advisory services to enable them to address collective action initiatives; and the employment of dedicated, locally-embedded 'coordinators' to assist in the promotion and implementation of collective initiatives
• Reviewing the scope for funding sources to reward collaborative environmental ventures; and for a funding mechanism which can draw funding streams from different sources to provide a single application point for collaborative projects that can achieve multi-functional benefits
• Emphasising the economic benefits of good environmental management in farm environmental advice; disseminating best practice through peer groups (through monitor farms, for example)
• More provision for training for agency and project-related staff involved in supporting collaborative action; establishment (or strengthening) of local farmer advisory panels to consult on proposals for local area initiatives and create a link between farmers and other stakeholders
• Strengthening existing farmer networks, with the possibility of establishing a formally recognised group structure for collaborating farmers, as in the Australian Landcare Model, that would provide the vehicle for funding bids, networking and information flow
• Building in post-project appraisal and information exchange; using networks to disseminate findings re: best practice
• Developing a programme of local 'futures' exercises to explore diverse opportunities for local areas in different regions; ensuring that both funding and advice are adaptable and appropriate to local conditions.

The authors noted that the changing policy environment at the time created a series of challenges and opportunities for rural land management. Of particular importance were:

• The introduction of cross compliance conditions on agricultural payments raising awareness among farmers of the importance of the environmental dimension
• The combination of national and compulsory modulation from 2005 presented a number of challenges in relation to agriculture's contribution to a multifunctional rural environment, providing a range of social and environmental benefits in addition to traditional food and fibre production
• Changes to the design of agri-environmental schemes in Scotland to include options for collaborative agreements, enabling groups of farmers to join together in a single application (Davies et al, 2004).

The National Landcare Programme, Australia - example of collective action

The National Landcare Programme was initiated by the Australian government in 1988 to encourage people to form Landcare groups, with the aim of addressing local environmental problems in a cooperative and coordinated manner. This was to be done through implementation of experimental and demonstration projects, with a focus for Landcare group activities on education, farm and catchment planning, tree planting, and demonstrations and trials of new practices (Dwyer et al, 2007). Landcare groups may be said to provide three services:

• An enhanced social learning environment in which farmers and other land users can be exposed to new ideas and experiment with their application
• The opportunity to scale up individual property planning exercises to a sub-catchment level, where consideration of the inter-relationships between individual farms could be used to develop more effective plans
• A set of peers to whom individual farmers could be held accountable for inaction in addressing the off-site impacts of farming practices identified through the planning process.

As reported by Dwyer et al, the success of the Landcare approach has been well documented. Participants were found to be significantly more aware of land degradation issues, and reported greater levels of knowledge of resource management, with the Landcare groups being an important influence on their management practices. However, several caveats have been noted in relation to the usefulness and transferability of the model:

• It is not clear whether increased awareness has translated into behaviour change. Evidence for environmental benefits is not conclusive and, although relationships between Landcare membership and higher levels of adoption have been noted, these may not necessarily be causal
• The independence of the groups can create problems. It has been suggested that more integration at a regional level is required to provide effective management
• The stewardship promoted in Landcare is already an established part of UK farming culture, so the main link between environmental management and farm profitability has already been made.

Macgregor and Warren (2006) note that one of the major success areas of Landcare has been in providing information and stimulating attitude change. Importantly, local community Landcare groups are central to decision making processes and most of the environmental issues tackled by the groups are identified at the local level with input and assistance from agri-environmental government agencies. Land management initiatives are therefore 'learner led,' with the agencies providing support. This provides groups with a feeling of 'control' over their physical and socio-political environments, leading to an increased demand for information, which can easily be diffused by the involved agri-environmental agencies.

7.6 Some implications for policy development and delivery

A variety of ways to ease transaction costs are suggested in the literature (Falconer, 2000; Defrancesco et al, 2008; Barnes et al 2011). Barriers to scheme participation might be reduced or removed by additional reimbursement to farmers for carrying out transactional activities, such as farm conservation audits and management plans, self reporting etc. However, the recent study by Weber (2011) concluded that a general reimbursement of farmers' transaction costs by the public may not be appropriate, since higher transaction costs may be associated with larger farm businesses, and willingness to spend more. Other suggestions for easing transaction costs include:

• Considering options to simplify record-keeping, to reduce duplication, make attempts to capitalise upon farmers' existing records and raise awareness of computer software that could aid with record-keeping
• Increased targeting of schemes (in terms of both land and activities), with clearer objectives and more effective channelling of information; i.e. passing high-quality messages though existing networks and informing the audience
• One stop shops for management agreements would save farmers' time on claim applications and processing payments
• Targeting assistance with transaction costs on smaller farms
• Third party involvement to facilitate agri-environmental policy transactions, in particular regarding the provision of advice to farmers on the costs and benefits of schemes
• Development of farmer networks and collective options for scheme entry
• An engagement strategy which offers support for administration and emphasises the resource saving aspects of the regulation.

In relation to strengthening the relationship between farmers and policy makers, there is a need to acknowledge farmers' stewardship of the environment and the relationship between responsible farming and the maintenance of landscape, biodiversity and water quality. Given that many farmers do not consider environmental issues to be their responsibility, the current emphasis of policy measures on business benefit appears to be the most effective way to influence behaviours in the short term, although it is not clear whether this will be enough to sustain behaviour change. An increasing body of evidence stresses the importance of using intrinsic values (concern about bigger-than-self problems) in a consistent and systematic way, as a priming mechanism to drive culture change. Appealing to extrinsic (or self-enhancing) values can motivate behaviour change, but such strategies reinforce the perceived importance of extrinsic values, undermining the basis for systemic concern about bigger-than-self problems (Crompton, 2010).

Developing agricultural policy in consultation with the farming industry includes building trusting relationships, and being aware of the specific constraints that farmers face. It is also important to set clear targets, so that farmers know what is expected of them; simplify processes (such as the planning system) where possible; and consider where more flexibility could be introduced to policy measures.

A number of mechanisms have been suggested for increasing the likelihood of effective collective action:

• Monitoring - improving audit systems can make benefits more apparent to participants
• Knowledge provision - raising awareness of the benefits of coordinated behaviours is likely to increase the number of instances of collaborative action.
• Customising policy measures to local circumstances will make collaborative working more feasible
• Developing incentives for cooperative action will inevitably make such behaviours more attractive to farmers
• Collective initiatives will be more appealing if they also serve as gateways to other services such as group training (Davies et al, 2004).

A collective approach is not cost-free. Identifying and realising benefits has its own transaction costs. The size of these costs will be affected by many factors such as how developed social networks are and how informed farmers are on these matters. Collaboration can also be risky, since it can slow down decision-making and the goals are not always clear or shared by all participants (Davies, 2006; Blackstock et al, 2009). However, the issues are worth exploring further, especially in relation to environmental issues that cover areas larger than individual farms, and as ways to encourage farmers to consider the wider implications of their actions.

Key points from the literature

Cost issues. Many mitigation options entail additional costs to farmers, and smaller farms may be less willing or able to tolerate these costs. Farmers are also required to assess risk in relation to the uncertainty of return on investment. The additional paperwork and administration associated with individual schemes are particularly unpopular with farmers.

Relationships between farmers and policy makers

• Farmer perspectives on environmental responsibility - farmers' first priority is the farm business. However, they may also see themselves as stewards of the landscape, and feel frustrated when this role is not acknowledged. Where environmental problems are recognised, farmers often feel unfairly singled out as the culprits. Farmers also feel that particular policy measures (such as NVZ areas) discriminate against particular groups of farmers
• Farmer endorsement of agricultural policy - if farmers believe that government policy is unjust, or unscientific, they are less likely to support it. This has implications for the costs of enforcing regulations, as well as damaging relationships between government and farmers.

Opportunities for retailers to help drive up standards. All major UK supermarkets are currently promoting low carbon products and encouraging producers to calculate the GHG emissions of their products. However, data availability and transparency are major issues in relation to assessment of life cycle GHG emissions of goods and services.

Relationships between farmers. A number of environmental goods and services demanded of agriculture are difficult to provide without collective action. Farmers are generally considered to value their independence, but there have been successful instances of farmer cooperation in Scotland: marketing and buying cooperatives, for example. There is also a tradition of collective action in some areas, such as crofting communities. Broadening the role of farm advisory services and the scope of funding sources, and strengthening existing farmer networks, would help to foster a culture of collaboration and cooperation.

Opinion formers also wished to stress that uptake of policy measures could be increased by:

• Ease of implementation - farmers do not mind making minor adjustments to their management practices, but even measures that appear to be 'win/wins' will not necessarily be adopted if they are perceived to be difficult to implement

Incentivising measures - without the possibility of a new, or increased, revenue stream, most farmers do not have the time/money to implement new methods. However, it is important to convince farmers (through provision of appropriate advice) that measures are beneficial in their own right, or farmers may revert to their previous practices when the initiatives end

• The role of supermarkets - supermarkets have the potential to be a major influence on farmer behaviours, as they are in a position to work with suppliers to raise environmental standards, as well as being well placed to influence consumer behaviour. However, interviewees raised concerns about where the additional financial burden would fall if supermarkets should insist on more stringent environmental standards for products in the future.

Some implications for policy development and delivery

• Transaction costs - a variety of ways to ease transaction costs are suggested in the literature, including reimbursement of some costs, particularly for smaller farms; increased targeting of schemes, with clearer objectives and use of existing networks to channel information; development of farmer networks and collective options for scheme entry; an engagement strategy which offers support for administration and emphasises the resource saving aspects of the regulation
• Farmers' responsibility for public goods - it is important to acknowledge the role of farmers as stewards of the environment
• Continue to develop agricultural policy in consultation with the farming industry - this includes building trusting relationships and being aware of the constraints that farmers face, as well as setting clear targets, simplifying processes where possible and considering the flexibility of measures
• Consider whether, where and how collective action might be encouraged - this includes making benefits more apparent to participants; raising awareness of the benefits of cooperation; customising policy measures to local circumstances; collective initiatives serving as gateways to other services, such as group training.