Private or Public? Farmer Preferences and Identities in Agri‐Environmental Contract Implementation

ABSTRACT This study investigates farmer preferences for publicly and privately financed agri‐environmental contracts. Using a labelled Discrete Choice Experiment with 366 German grassland farmers, we examine trade‐offs between payment schemes (public/private), payment criteria (practice‐based/result‐based), collaboration options, and advisory services. Our results show that farmers require higher compensation for privately financed contracts compared to public ones. On average, respondents prefer practice‐based over result‐based payments and value free advisory services, particularly in private schemes. Preferences for collaborative implementation indicate a strong desire for autonomy. A key contribution of this study lies in integrating farmer identity into the analysis. Drawing on a psychometric scale of ‘good farmer’ attributes, we identify three latent identities—productivist, environmentalist and civic‐minded—and show that these significantly explain heterogeneity in preferences and land enrolment decisions. Productivist farmers demand higher compensation and commit less land, while environmentalist and civic‐minded farmers are more inclined to participate and enrol larger areas, even at lower compensation levels. These findings highlight the importance of tailoring agri‐environmental contracts to farmers' identities through for example framing of agri‐environmental contracts accordingly. Privately financed schemes, such as those based on crowdfunding platforms, must address perceived risks, offer advisory support and develop communication strategies that resonate with different identity profiles. Recognising farmer identity as a behavioural driver can enhance participation in both public and private agri‐environmental schemes and inform more effective contract design.