Designing Agri-Environmental Schemes to Cope with Uncertainty

One of the factors that discourages farmers from enrolling in agro-environmental schemes (AES) is the uncertainty of the costs and beneﬁts associated with the adoption of the new practices. In this study, we distinguish between the "internal uncertainty" that is related to the characteristics of the farmer and his/her parcels and "external uncertainty", which is related to the occurrence of external events. We propose three innovations to better account for uncertainty in AES design and test their attractiveness through a choice experiment. We ﬁnd that proposing contracts that allow suspending the conditions of the contract for one year enhances participation.