CALCULATING RESULT-BASED AGRI-ENVIRONMENT PAYMENTS – LEARNING FROM THE FRONT-RUNNERS

Result-based agri-environment payments (RBAPs) represent an innovative approach to incentivizing sustainable farming by linking payments to measurable environmental outcomes, such as biodiversity enhancement, water quality, and soil health. This paper explores the mechanisms used to calculate these payments across different countries, including Germany and Ireland, where result-based schemes are well-established. Drawing on design process analyses and case studies, the aim of the research is to investigates how payments are structured to reflect costs such as opportunity costs, management expenses, income forgone and transaction costs. Results indicate that while RBAPs offer flexibility and encourage farmer innovation, they also introduce complexity in payment calculation, requiring detailed cost assessments and robust monitoring systems. Despite these challenges, the schemes in these countries demonstrate the potential of result-based approaches to deliver targeted environmental benefits. The study concludes that successful RBAPs must balance fair compensation for farmers with effective incentive structures, while addressing risks and uncertainties associated with achieving ecological outcomes. This research provides valuable insights into the design and calculation of result-based payments.