Description

Farmers receive compensation payments per field if they continue to grow a particular crop that plays a valuable role in environmental or resource protection for this particular field (known as ‘strategic cultivation’).

In industrialised countries, the ban on conversion is often used as an environmental and resource protection measure (e.g. the ban on converting grassland to arable land to reduce land consumption). However, in developing countries and emerging economies, this tends rather to be used as a method of controlling supply and hence the market.

Requirements

• Clear and coherent political strategy and targets for policy-makers and public authorities
• Constant market surveying and forecasting
• Monitoring and control system for the agricultural production processes supported
• Regular neutral inspections on farms and in agri-food enterprises
• Regulated and legally protected payment structures
• Sanction mechanisms

Possible Negative Effects

• Inefficient allocation of resources and market distortions