Payments for environmental services with ecological thresholds: farmers' preferences for a sponsorship bonus

Designing incentives for agri-environmental public good provision with threshold effects calls for payment mechanisms favouring critical mass participation and continuity of commitments at the landscape scale. Studies show farmers are reluctant to collective requirements but favourable to a bonus rewarding collective action. We conducted a choice experiment to test the acceptability of a bonus in a hypothetical scheme for improving rivers’ water quality in France. We introduce a sponsorship bonus each time the farmer convinces a peer into entering the scheme that can be combined with a collective result bonus per hectare if the river reaches a higher step of the water quality scale. We consider the involvement of local financers could increase the willingness to pay beyond opportunity costs and income foregone, and propose higher levels of payment than agri-environmental schemes. Results suggests a sponsorship bonus on its own is cost-effective, and that preferences for the bonus levels are heterogeneous..