This paper reviews the findings from the last 20 years on the behavioural factors that influence farmers’ decisions to adopt environmentally sustainable practices. It also proposes policy options to increase adoption, based on these behavioural factors and embedded in the EU Common Agricultural Policy. Behavioural factors are grouped into three clusters, from more distal to more proximal: (i) dispositional factors; (ii) social factors and (iii) cognitive factors. Overall, the review demonstrates that considering behavioural factors enriches economic analyses of farmer decision-making, and can lead to more realistic and effective agri-environmental policies.

"Agri-environmental schemes (AES) have had a limited effect on European agriculture due to farmers' reluctance to participate. Information on how farmers react when AES characteristics are modified can be an important input to the design of such policies. This article investigates farmers' preferences for different design options in a specific AES aimed at encouraging nitrogen fixing crops in marginal dry-land areas in Spain. We use a choice experiment survey conducted in two regions (Aragón and Andalusia). The analysis employs an error component random parameter logit model allowing for preference heterogeneity and correlation amongst the non-status quo alternatives. Farmers show a strong preference for maintaining their current management strategies; however, significant savings in cost or increased participation can be obtained by modifying some AES attributes." Copyright (c) 2010 The Authors. Journal compilation (c) 2010 The Agricultural Economics Society.

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