Determinants of the perceived administrative transaction costs caused by the uptake of an agri-environmental program

Abstract

Farmers’ subjectively perceived that administrative transaction costs are of high importance for the uptake of agri-environmental programs with direct effects on the effectiveness and efficiency of these programs and the well-being of farmers. This paper empirically estimates private administrative transaction costs resulting from an uptake of the newly introduced grassland-based milk and meat program in Switzerland, based on farmers’ perceived administrative workload. Using ordered logit models, we analyze how the administrative tasks and farm and farmer characteristics influence the perceived administrative workload. We find that the time spent on monitoring or inspection tasks has no effect. In contrast, an outsourcing of program-related administrative tasks significantly reduces the perceived administrative workload. We also find that a better understanding of agricultural policy regulations significantly reduces the farmers’ perceived administrative workload. We recommend that public administration improve the communication of agricultural policy regulations, rather than investing in the simplification of administrative forms.

Keywords:

• Transaction costs
• workload
• agri-environmental program
• administrative work

Disclosure statement

No potential conflict of interest was reported by the authors.

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Notes

1 Ruminant farmers who adopt the GMF program have to meet two feed restrictions. First, the proportion of concentrates they use in the total feed for all ruminants must be lower than 10 percent throughout the year. Second, the proportion of grass in the total roughage feed for all ruminants must be higher than 75% for farms located in the lowlands and higher than 85% for farms located in the mountains. The GMF program guidelines define those feed components that count as roughage-based feedstuff (Der Schweizerische Bundesrat 2017, appendix 5, cypher 1): Permanent grassland/meadows and temporary leys/pastures (fresh/ensiled/dried), whole-plant maize (fresh/ensiled/dried), mixture of rachis and corn-cob kernels, coarse corn-cob meal and corn-cob silage without husks (CornCobMix [CCM] for cattle fattening only; in all other cases classed as concentrate), cereal-whole plant silage, fodder beet, sugar beet, sugar-beet pulp (fresh/ensiled/dried), beet leaves, chicory roots, potatoes, waste from fruit and vegetable processing, draff, straw for feeding. Thus, other animal feedstuffs not included in this list of roughage-based feedstuff count as concentrates.