Auctions in an outcome-based payment scheme to reward ecological services in agriculture – Conception, implementation and results

5. Results of the first auction

In the beginning of the first bidding procedure in April 2004, the Regional Advisory Board
decided about the demand for ecological goods and agreed that ecological goods in
grassland should be announced in the first auction. These ecological goods were classified
into grassland I, grassland II and grassland III, whereas grassland III represents the highest
quality of botanical diversity.

The tender documents were requested by 140 farmers in the model-region. 75 at
information meetings which took place in the beginning of the bidding procedure in June
2004 and 65 via telephone or e-mail. In the end 38 farmers with together 199 plots
delivered offers, which corresponds to a total area of 350,71 hectares. Three offers could
not find consideration since they had only been received after the offer period. Further
three offers were rejected, since they exhibited formal defects. Due to a limited budget of
30.000 € an acceptance of the tender could not be given to all offers. 28 farmers with
altogether 159 plots received an addition. This corresponds to an area of 288,56 hectares.
Differentiated by the ecological goods grassland I, II and III the results of the first auction
are shown in table 1.

Table 1: Results of the first auction.

We can see, that for grassland I 148 plots were offered, from which 109 got accepted. This
corresponds with 198,25 hectares. The range of the advertising prices of all offers for
grassland I covers 40 to 250 € per hectare. At the ecological goods grassland II from 35
offered plots 32 were accepted, what corresponds to an area of 53,33 hectares. The range
of prices comprises 55 to 300 € per hectare. All 18 offered plots with a total area of 36,98
hectares were accepted at the ecological goods grassland III. The prises for grassland III
cover 100 to 350 €. The available budget was divided with 54 % to grassland I, 24 % to
grassland II and 22 % to grassland III.

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