The environmental supply of farm households : a flexible willingness to accept model

The purpose of the paper is to analyse farmers’ participation in environmental schemes, which are gaining a growing importance within the European agricultural policy. These schemes are implemented through voluntary contracts that pay farmers for the provision of environmental services. The microeconomic model that is developed is a farm household model that incorporates the producer and consumer behaviour of the farmer to optimise his environmental supply considering that the environmental service that he is supplying also has the characteristics of a public good. Defined as the difference between the profit loss in providing the environmental service and the willingness to pay to consume this service, the household’s “willingness to accept” (WTA) is compared with two flexible WTA measures that account for the technological flexibility of the environmental supply. Data come from a survey of an agri-environmental scheme implemented in the Walloon region of Belgium since 1995 and intended to protect the nesting of some endangered bird species. Econometric results show that contingent valuation is a reliable method to reveal the behaviours of farmers facing the invitation to participate in this scheme. They also confirm that farmer behaviour is also influenced by environmental preference