Eliciting 10% of semi-natural habitats on farmland for biodiversity: Recommendations for cost-effective policy

The EU has set an objective of reaching 10% of landscape features on its agricultural land by 2030 as part of its latest Biodiversity Strategy. This share is often considered the minimum amount of semi-natural habitats required to halt biodiversity declines and ensure the provision of ecosystem services. This policy objective has faced considerable political opposition due to potentially high budgetary and opportunity costs. We explore farmers' preferences towards hypothetical incentive schemes that ensure the provision of 10% of semi-natural habitats at the landscape level. We use the results of a discrete choice experiment to estimate the total budgetary costs of different schemes and potential strategies to reduce these costs. Finally, we examine regional patterns of farmers' enrolment under various policy scenarios. We find that farmers, on average, demand 21 €, 33 € and 29 € per ha of the entire farm to provide 1% of extensive meadows, woody landscape features and fallow land, respectively. While the total cost of reaching the 10% semi-natural habitat goal at the landscape level drastically exceeds the currently available budget when all farmers contribute equally, the costs can be considerably reduced if an auction-like mechanism is used. Our results show that to reach 10% of semi-natural habitats cost-effectively, careful policy design is required in terms of scheme flexibility and farm-level contributions that are aligned with local conservation targets and the desired scale of implementation. • Over 90% of farmers have negative preferences for semi-natural habitats on their farm. • Positive preferences among farmers are most frequent for extensive meadows. • Scheme cost-effectiveness can be increased by enrolling fewer farmers that contribute more. • Scheme flexibility reduces policy costs but can lead to worse conservation outcomes • Policy design should be tailored to clearly defined local conservation goals.