Uniform incentives, heterogeneous landscapes: within-farm allocation of biodiversity areas under agri-environmental schemes

Agri-environmental schemes often provide uniform incentives while leaving farmers discretion over where within their farms measures are implemented. Existing research has focused primarily on participation and enrolled area, whereas empirical evidence on within-farm allocation under real-world policy conditions remains scarce. Drawing on 2022 administrative data from 4,624 farms and 171,425 arable parcels in north-eastern Austria, we examine biodiversity-area allocation under Austria’s agri-environmental program, which combines uniform per-hectare payments with a requirement to designate at least 5% of arable land. A latent-class logit model exploiting within-farm variation reveals systematic sorting along opportunity-cost gradients, alongside substantial heterogeneity in allocation responses across farms. A complementary spatial analysis shows that these decentralized decisions aggregate into uneven coverage across participating farmland. Taken together, our findings demonstrate that uniform agri-environmental incentives are not spatially neutral and highlight within-farm allocation as an important, yet often overlooked, dimension of agri-environmental policy design.