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Assessing potential uptake of agri-environmental schemes based on farm and farmer characteristics only results in an incomplete analysis because it neglects the effects of motivational issues of the institutional design of contracts, as set up by the government, and of social capital. In this paper we describe contract choice using a trivariate probit model and taking into account farm and farmer characteristics and motivational issues. Motivational issues in this study include the perception of institutional design, the use of extension services, trust in the government, and preferences for stable policies. Results show that besides farm and farmer characteristics these factors are important for the likelihood of enrolling in agri-environmental contracts. They do not influence every contract type in the same way and further decisions to conclude different contract types are connected. If farmers perceive the design of an agri-environmental scheme as weak or favour a stable policy they are less likely to conclude contracts for biodiversity protection. Farmers who do not trust the government are less likely to conclude contracts for less intensive practices. Involvement in general networks increases the probability of contracting for wildlife and landscape management and less intensive practices whereas this factor is not important for biodiversity protection. The results suggest that taking into account motivational issues and differentiating towards different contract types can increase effectiveness and efficiency of agrienvironmental schemes.

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This paper presents results of a contingent valuation study based on responses from household members living in Winterswijk, The Netherlands. The respondents are asked to report their preferences on a range of willingness to pay (WTP) for agri-environmental schemes (AES) provided by farmers. Estimated WTP based on both two-step Heckman selection and Tobit model is reported. Results indicate that the willingness to pay appears to depend positively on the level of trust and membership status of household members towards environmental organizations.

Contracts are mechanisms for carrying out transactions. Leasing land is a voluntary transaction in which property rightssuch as user and income rights -are transferred from landowners to tenants.The bundle of property rights transferred within a lease transaction varies with the type of contractual arrangement. Analysis shows that for the landowner the value of the bundle of property rights to land is determined by the type oflease contract. Landowners prefer lease contracts with as little regulation as possible. Lease regulation can be characterized as a 'handbook' for concluding lease contracts. However, reducing regulation requires a shift in co-ordination mechanisms from that of the handbook to that of the 'invisible hand' (prices) and 'handshake' (e.g., mutual adjustment). Making use of the handshake and price as co-ordination mechanisms implies that the importance of trust and reputation will increase for both tenant and landowner. In 20°7, the Dutch government introduced two new types of formal lease that rely less on handbook co-ordination. Whether a more liberalized lease system will lead to a change in the area leased not only depends on landowners but also on tenants, because contracts are two-sided mechanisms.