Why Farmers Leave Green Schemes Early — and What This Means for EU Climate Policy
Imre Fertő
Agri-environmental climate schemes (AECS) are one of the European Union’s main tools for encouraging farmers to adopt practices that protect soil, water, biodiversity, and the climate. These schemes are designed with multi-year commitments in mind; their environmental benefits accumulate slowly and rely on continuity. Yet in practice, participation is often short-lived. Most research has focused on why farmers enter these schemes, but much less is known about how long they stay. Understanding the temporal dimension is essential if AECS are to deliver on their environmental promise.
Using eight years of Hungarian FADN data covering 1,265 commercial farms, our study investigates the duration of participation and the factors driving early departures. The results show that the average farm remains in AECS for a little more than two years, and fewer than one in ten stay for the full period. A significant share of farms exit after a single year, and many re-enter later, creating a stop-and-go pattern that undermines ecological outcomes. Environmental practices such as grassland management, reduced fertiliser application, or buffer-strip maintenance require stability over time; fragmented participation weakens their effectiveness.
Economic incentives are central to explaining early withdrawal. Farms that derive a larger share of their income from market activities are far more likely to leave AECS. The payments offered by these schemes often do not compensate for the opportunity costs of reduced flexibility or the potential lowering of yields. When commodity prices rise and farming becomes more profitable, environmental schemes lose their relative attractiveness. This procyclical pattern leaves AECS vulnerable to fluctuations in market conditions and emphasises the need for payments that better reflect the true economic trade-offs farmers face.
Administrative burden is another key driver of exit. Farms relying heavily on unpaid family labour—common across Central and Eastern Europe—tend to leave earlier, suggesting that administrative and monitoring requirements exceed the capacities of many smaller or family-run farms. These farms may control environmentally significant land but lack the professionalised management structures needed to handle complex compliance frameworks. As a result, the current design of AECS risks excluding precisely the farms that policymakers often hope to engage.
Farm size displays a non-linear relationship with participation duration. Medium-sized farms are the most stable participants, while very small farms struggle with transaction costs and very large farms find the payments relatively insignificant. This dual challenge reveals that a one-size-fits-all incentive structure is inadequate; the motivations and constraints of farms differ substantially across the size distribution. Diversification also matters. Farms producing a wider range of products tend to remain longer in AECS, reflecting greater economic resilience and reduced exposure to price volatility.
A notable feature of the participation patterns is the prevalence of re-entry. Many farms leave AECS only to return later, indicating instability in the policy environment or uncertainty about scheme continuity. Such fluctuations weaken farmer trust and reduce the long-term impact of environmental measures.
Taken together, these results point to several implications for EU agricultural sustainability policy. Payments must be better aligned with the opportunity costs of participation if AECS are to compete with market incentives. Administrative demands should be simplified, and advisory services strengthened, especially for smaller farms that lack dedicated managerial resources. Finally, heterogeneity among farms—particularly in terms of size, labour structure, and diversification—should be explicitly recognised in scheme design.
The central message is that environmental policy cannot rely solely on initial adoption. The real challenge lies in maintaining participation over time. As the EU advances its climate and biodiversity agenda through the Green Deal and reforms of the Common Agricultural Policy, designing AECS that farmers can realistically commit to in the long term will be crucial. Environmental progress depends not only on encouraging farmers to join green schemes, but also on ensuring that they can afford—and manage—to stay.
Fertő, I., & Bojnec, Š. (2025).
Understanding the temporal dynamics of agri-environmental climate scheme adoption.
Journal of Environmental Planning and Management.
https://doi.org/10.1080/09640568.2025.2587266
