Restoration of Irish farmland biodiversity: The role of results-based payment schemes

by Fergal Scully

Traditionally, Irish agriculture has been extensively managed; large hedgerows, semi-natural grasslands, wetland habitats, and low-input arable systems supported a complex assemblage of farmland biodiversity. Agricultural intensification on the back of ill-informed government subsidies has resulted in large scale habitat destruction and degradation. Agriculture is one of the main drivers of biodiversity loss in Ireland. One in five species in Ireland is threatened with extinction, demonstrating the severity of the situation. Solving this issue is critical.

Agri-environment schemes

The interconnectedness of agriculture and nature has been recognized on a European scale. Since 1994 it has been compulsory for all EU member states to provide an agri-environment scheme, in which farmers receive payments to support the restoration and maintenance of biodiversity in agricultural landscapes. This led to the introduction of Ireland’s first agri-environment scheme- the Rural Environment Protection Scheme (REPS). Like the majority of agri-environment schemes in Europe, REPS was designed as an action-based scheme. Within such schemes, farmers are paid to complete generic tasks with little importance placed on actual results. This action-based system has continued in subsequent nationwide schemes, including Ireland’s current scheme, GLAS. Despite major investment in action-based schemes within the EU, farmland biodiversity continues to decline, creating questions regarding the suitability of this approach.

An alternative approach to agri-environment schemes is a results-based payment system. This is an output-based system in which farmers are paid for the results they produce. This differs from the input-orientated system of an action-based approach, which focuses on the actions performed. In Ireland, the results-based approach was first implemented through locally-led agri-environment schemes, which have been used to address local problems with context-appropriate solutions. These schemes, such as The BRIDE project in the River Bride catchment and The Burren LIFE Programme in Co. Clare does not conform to the broad-stroke approach of previous nationwide schemes and has been found to be extremely effective in enhancing farmland biodiversity.

The influence of locally-led schemes, coupled with a push from the EU towards results-based agri-environment schemes to provide greater cost-effectiveness, has resulted in the creation of Ireland’s first nationwide results-based agri-environment scheme, aptly named Results-Based Environment-Agri Pilot Project (REAP). REAP will trial the use of a results-based payment in achieving biodiversity outcomes and will directly influence the implementation of this system on a larger scale in the Irish Rural Development Plan 2023. Will results-based schemes prove to be the silver bullet in solving Ireland’s biodiversity loss?

Questioning results-based schemes

Before tearing up the current script and implementing a full-scale results-based payment scheme, the advantages and disadvantages of this system must be understood.
There are advantages of results-based schemes that address some of the problems associated with action-based schemes. A results-based scheme makes a clear link between biodiversity outcomes and payments. Furthermore, it does not specify the action in which this result must be obtained, allowing farmers to integrate the production of the desired outcome into their existing management practices. This freedom facilitates adaptability and allows farmers to draw on their existing wealth of local knowledge and skill, which is essential in integrating the importance of biodiversity into long-term farming practices. A results-based system is cost-effective, as it incentivizes farmers to select only the biodiversity outcomes on the land in which it can be achieved and to strive for improvement year on year.

Although results-based schemes are mostly depicted in a positive light, there are disadvantages that should be made clear. Result-based schemes are limited to circumstances in which the relationship between agricultural practice and biodiversity outcome is established and can be represented by indicators. The freedom of farmers to innovate in these schemes is greatly influenced by advisory support, without which farmers may not have the ability to achieve the desired outcomes. It is important to note that a results-based approach carries a financial risk to farmers, as the desired outcomes can be influenced by factors outside of the control of farmers. In addition, results-based payment schemes carry a high initial cost, requiring an adaption of the management system, advisory support, training, and repeated monitoring of results.

Future of payment schemes

A result-based payment approach cannot be perceived as a silver bullet given its drawbacks. However, the business-as-usual approach is not an option. Instead, a results-based approach would represent a positive step in restoring Irish farmland biodiversity, which is achievable in previous locally-led results-based schemes. To mitigate the financial risk to participants, a hybrid results-based system that incorporates action payments could be implemented. The targeted actions within a hybrid approach can complement the results-based payments. The key to success with any payment scheme, results-based or otherwise, is farmer participation. These schemes are not obligatory for farmers, and so the unwillingness of farmers to properly engage will cause the programme to fail. Creating a results-based agri-environment scheme that works for farmers as well as biodiversity will be the key to success.