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

These results show, that in this case the use of auctions in fact leads to very differentiated
offers and comprises thus a practical potential for a more efficient use of public funds.

6. Two surveys of local farmers

6.1. The first survey

In the first survey all farmers who requested the tender documents had as well received a
written questionnaire in a separate envelope. This questionnaire contains questions about
the attendance or non-attendance at the bidding procedure, about the payment scheme and
agri-environmental programs in general. Furthermore the farmers were asked to specify the
time they spend to take part in the auction. This data will be evaluated in a substantial
study on the transaction costs related with the farmer’s taking part in this payment scheme
and in comparison with taking part in existing agri-environmental programs. From 35
farmers participating in the questioning, 30 delivered an offer and 21 farmers operate the
farm as a sideline. 24 farmers work in a conventional and eleven in an ecological way.

As the aspect which causes most difficulties to the participating farmers, the price-
calculation proves. However in smaller measure than expected, because to 50 % of the
farmers the price calculation delivered relatively heavily difficulties. The other 50 %
valued the price calculation as relatively simply. Asked for the reasons why the price
calculation causes problems, the uniform reason was, that there was no comparison or
empirical values to be present and that it is the first auction ever in which the farmers in the
model-region participated. From this it can be concluded that these farmers are not quite
able to calculate orientated at their own individual cost structures and they still focus on an
externally given point of reference, similar to an uniform premium.

A further goal is to determine the expenditure of time which is connected with the offer
generation for the participating farmers. These data is processed in a comprehensive
transaction cost study, in which the appropriate transaction costs of the farmers will play a
central role. Some of these results are now introduced briefly. For the procurement of the
tender documents an average value of 32 minutes was needed. The reading and
understanding of the tender documents took 39 minutes in average. The calculation of the
price, including the choice of the ecological goods and the plot takes in the average 90

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