Innovative Market and Policy Instruments to Promote the Agro-ecological Transition Strategies

The overarching objective of Task 5.4 is to analyse market and policy incentives, with governance mechanisms, supporting Agro-ecological Farming Systems (AEFS), by delivering a multi-criteria assessment (MCA) of co-constructed innovative market and policy incentives (MPIs). To achieve that objective a mixed methods approach is used, where MCA and qualitative analysis complement each other by gathering information about different aspects of the MPIs and their implications for the governance and future policies. The research design is structured towards three more specific objectives, each being associated with a methodological step, as follows:

Step 1. To investigate the MPIs that need to be improved to ensure proper functioning. This objective is achieved via a multi-criteria analysis (MCA) of selected MPIs, based on performance and relevance criteria (Effectiveness, Undesired effects, Targeting, Efficiency, Feasibility, Urgency and priority) selected via EU stakeholder consultation;

Step 2. To identify changes in the design of the MPIs, owing to 8 categories (Income and market support, Agri-environment payments, Payments for investments, Knowledge promotion, Certification schemes, Food policies, Networking/cooperation, Other measures), to increase their performances. This objective is achieved via a qualitative analysis;

Step 3. To explore how future policies can facilitate governance adjustments and opportunities for the correct implementation of the mix of MPIs. This objective is achieved via a qualitative analysis.

Data for all methodological steps are collected at the case study (CS)-level via workshops and/or interviews from the same set of stakeholders, using guidelines prepared by CREA. Result interpretation creates a link with Deliverable 3.4 (Schwarz et al., 2021) by referring to the different transition stages observed in the case studies (Initiating and Enhancing) and to the barriers that the MPIs aim at removing.

Performance and relevance rankings share the top three MPIs, i.e. Knowledge promotion, Networking / Cooperation and Payments for investments. When considering Initiating vs Enhancing case studies, Knowledge promotion is considered the backbone of the MPIs mix for both CS groups; instead there is trade-off in the relevance and performance ranking of Networking/cooperation MPIs, with Enhancing displaying greater figures. A possible reason for this difference is the greater need for aggregation, peer-to-peer discussion, and integration of several different actors in CS at the Enhancing stage, compared with those at the Initiating stage, as the knowledge challenge has shifted from knowledge creation and diffusion (Initiating) to capacity building (Enhancing).

The different transition stage might support the understanding of the better ranking of Knowledge promotion, Payments for investments, Agri-environment payments, and Certification schemes in the Initiating than in the Enhancing CSs. Those MPIs can trigger a transformation process of those farming systems that are still based on conventional, resource use efficiency or input-substitution production methods. Income and market support MPIs are considered not essential or moderately essential to initiate or enhance the adoption of AEPs. This looks reasonable when considering substantially economic objective of these MPIs and the concern of farmers at the Enhancing stage not to jeopardize the survival of the farms due to lack of recognition by the market for the efforts made to transform their farming system. Then for farms at the Enhancing stage, Income and market support could become an effective payment for ecosystem services related to AE redesign.

Compared to Initiating CSs, Enhancing CSs display a richer menu of instruments that can strengthen capacity building and social capital. This suggests the existence of a systemic vision in addressing the problem of knowledge promotion, ranging from changes on the design of dedicated instruments to promote knowledge diffusion to changes on the design of regulatory restrictions and incentives to raise awareness among final recipients (farmers).

CAP Pillar II instruments, especially knowledge promotion, cooperation and agri-environment payments, are evaluated as the most effective for encouraging the AE transition. This is especially relevant for farms that are initiating the adoption of AEPs and that need to face the challenge of knowledge creation. Food policies and certification schemes play a pivotal role by allowing the diffusion of AEPs - especially when the transition is initiating - and the related knowledge. Networking/cooperation instruments are crucial to create synergies within and amongst food chains and to support consumer responsibilities and involvement, which are needed to address the capacity building challenge and enhance AEPs towards system redesign.

To support the removal of the knowledge and social capital barriers, future policy should sustain the access to advisory services by farmers, to raise awareness about agro-ecological practices. With agricultural diversification being a core theme in agro-ecology, the creation of partnerships and collective projects is a key step towards the increased availability of agro-ecological food on the local markets. Then, there is a need for targeted interventions for intermediate institutions (e.g., rural districts) and for the empowerment of the cooperation measures of the Rural Development Programme (e.g., pilot food chain projects).

To remove the value added and market access barriers, consumer markets should be more sustainable. Future policies can support sustainable market development through various instruments. For example, new voluntary “agro-ecology” certification and labelling schemes may be required in the short term. Public procurement initiatives are an additional way to drive the agro-ecological transition from the demand-side. These can build on already existing programmes (e.g. school programmes), but to improve public procurement initiatives, new and more ambitious standards are required in the call for tenders for public schools (e.g., local food, reducing food waste).

To remove the policy design barriers, there is a need for lighter bureaucracy and for a simplification in the requirements for policy support. Further experimenting innovative MPIs like result-based payments and eco-schemes targeted to AE practices might speed-up the AE transition process in Europe, as well.

UNISECO is a European research project aiming to develop innovative approaches to enhance the understanding of socio-economic and policy drivers and barriers for further development and implementation of agro-ecological practices in EU farming systems. Learn more about the project: https://uniseco-project.eu/

This project has received funding from the European Union's H2020 research and innovation programme under grant agreement No 773901.

This publication reflects only the authors' view and the European Commission is not responsible for any use that may be made of the information it contains.