Threshold effect and coordination of agri-environmental efforts

In this paper, we propose mechanism design for agri-environnemental schemes that ensure their environmental and social efficiency, when the bio-physical processes are characterized by threshold effects. Public regulation of agri-environmental processes has to cope with two different problems : on the one side, there are asymmetric information between the regulator and the farmers on the adoption cost and the effective effort of the farmers ; on the other side, the regulator and the farmers share uncertainty on the relationship between farming practices and environmental quality. These two difficulties often cumulate into the agri-environmental schemes and may lead, when threshold effects occur, to no effective environmental effect and to farmers' discouragement. Using a simple micro-economic model and the analysis of an example, this paper shows that a perennial and evolving management of agri-environmental schemes allows a local capitalization of competences and increase their efficiency. This management exploits economies of scale and of learning (management and technical), when the design of contracts allow to precise and quantify threshold effects, which are often badly known and have local characteristics. In some particular cases, sending a signal of a requested minimal contracting area is a information that can lead to an increased participation of the farmers.