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



minutes. The immediate filling of the tender documents took 77 minutes at average. So,
related to this first survey, the whole submittal of offers averages about 238 minutes.

18 farmers had already participated in agri-environmental programs in the past. Compared
these expenditure of time with the participation in existing agri-environmental programs,
three farmers evaluate the expenditure of time needed to take part in the auction as much
higher, three as higher, six as equal, five as lower and one farmer as much lower. In
another question the farmers where asked to compare the expenditure of time to take part
in the auction with a general aid request and 32 farmers delivered an answer. One farmer
evaluates the expenditure of time during the bidding procedure as much higher, four
estimates it as higher, 17 as equal, nine as lower and one farmer as much lower. Finally I
would like to deal in the context of this contribution with the evaluation of the use of
auctions in agri-environmental programs. Three farmers judge the use as very good, ten as
good, ten as mean, seven as bad and four as very bad.

6.2. The second survey

In the second survey all 37 farmers2 who made an offer during the first bidding procedure
were asked, so the database for a comprehensive transaction cost study can be extended by
further detailed questions particularly to the expenditure of time of the farmers, possible
price agreements with others farmers and detailed questions concerning the farmer’s
transaction costs. The goal is - apart of the determination of transaction costs - to draw
conclusions on the practical efficiency of auctions in agri-environmental programs
generally and particularly as a part of this remuneration concept.

In the context of this paper the results concerning the farmer’s transaction costs are focused
and presented. One main aspect was to value the farmer’s expenditure of time needed to
participate in the first auction. Therefor the farmers were asked to tell, what they think is
an adequate remuneration if they would be paid immediate for making an offer and 21
farmers answered that question. The value differs from 10 to 25 € per hour and leads to an
average earning of 16,76 € per hour or 0,28 € per minute. Multiplied with the average
expenditure of time - 238 minutes as ascertained during the first survey - the average

2 In fact 38 farmers made an offer, but in the context of the second survey one farmer could not be
considered.

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