Do agri-environment schemes deliver environmental change?
Evidence from wine farms in Hungary
Imre Fertő, Gergely Csurilla, Szilárd Podruzsik
Agri-environment schemes have become a cornerstone of European agricultural policy. They are designed to reconcile two objectives that are often in tension: maintaining farm incomes while reducing agriculture’s environmental footprint. Over successive reforms of the Common Agricultural Policy (CAP), these schemes have expanded in scope, budget, and ambition. Yet a fundamental question remains unresolved: do agri-environment schemes actually change farmers’ behaviour in meaningful ways?
This question has gained urgency as the European Union places stronger emphasis on sustainability, pesticide reduction, and climate mitigation. Policymakers increasingly rely on voluntary schemes to deliver environmental outcomes, but the evidence on their effectiveness remains mixed. Much of what we know comes from studies of arable farming systems in Western Europe. Far less attention has been paid to specialised, high-value sectors such as viticulture, despite their intensive use of chemicals and energy.
Our recent study focuses on wine production in Hungary and examines whether participation in agri-environment schemes is associated with lower use of fertilisers, crop protection products, and energy. The findings offer insights not only into environmental policy effectiveness, but also into the structural and political economy factors that shape who participates in such schemes and why.
Why viticulture matters
Wine production occupies a distinctive position in European agriculture. It is economically important, regionally concentrated, and often culturally emblematic. At the same time, it is one of the most input-intensive farming systems, particularly in relation to pesticides. This makes viticulture an important test case for agri-environment policy: if schemes struggle to reduce inputs here, their broader environmental impact may be limited.
Hungary provides a particularly relevant context. Like many Central and Eastern European countries, it combines a long tradition of wine production with relatively recent exposure to EU environmental policy instruments. Institutional capacity, farm structure, and access to advisory services differ markedly from those in Western Europe. Understanding how agri-environment schemes function in this setting helps broaden the empirical base on which CAP reforms are debated.
Moving beyond simple comparisons
A persistent challenge in evaluating agri-environment schemes is selection. Participation is voluntary, and farmers who choose to join are rarely representative of the farming population as a whole. They tend to be larger, better capitalised, and more capable of dealing with administrative requirements. Any evaluation that ignores these differences risks attributing pre-existing characteristics to policy effects.
To address this, our analysis uses detailed farm-level data from 2014 to 2020 and applies multiple empirical strategies to compare participating farms with observationally similar non-participants. The aim is not to claim perfect identification, but to reduce bias and provide a more credible assessment of how participation is associated with changes in input use.
What changes—and what does not
The results are instructive precisely because they are not uniformly positive.
Participation in agri-environment schemes is associated with lower spending on crop protection products. This suggests that schemes may encourage changes in pest management practices, potentially through reduced chemical use or greater reliance on integrated approaches. Given the environmental and public health concerns surrounding pesticides, this is a meaningful finding.
At the same time, we find no clear evidence that participation reduces fertiliser use or energy consumption. These inputs appear largely unaffected by scheme participation. This pattern is consistent across different estimation approaches and points to limitations in how current schemes address certain environmental pressures.
One interpretation is that agri-environment schemes tend to focus on visible and politically salient issues—such as biodiversity or pesticide reduction—while treating fertiliser and energy use more indirectly. Another is that economic and agronomic constraints limit farmers’ ability to reduce these inputs without compromising yields or quality, particularly in a competitive, high-value sector like wine.
Who participates—and why that matters
An equally important finding concerns who joins agri-environment schemes. Larger and more economically robust farms are significantly more likely to participate. This is not surprising. Compliance with scheme requirements involves administrative effort, record-keeping, and often upfront costs. Farms with greater resources are better positioned to absorb these burdens.
From a political economy perspective, this raises questions about distribution and effectiveness. If participation is skewed toward larger farms, then the environmental benefits of agri-environment schemes may also be unevenly distributed. Smaller farms—often more vulnerable and more constrained—may be excluded, even though they collectively manage substantial areas of land.
This pattern also has implications for policy legitimacy. Schemes perceived as benefiting a narrow segment of the farming population may face resistance, particularly when environmental outcomes are uncertain or difficult to observe.
Lessons for policy design
What do these findings imply for agri-environment policy?
First, voluntary schemes can influence behaviour, but their impact depends critically on design. The reduction in crop protection spending suggests that when objectives are clear and practices are well-defined, farmers respond.
Second, not all environmental goals are equally addressed. Fertiliser and energy use appear more resistant to change under current schemes. Achieving reductions in these areas may require more targeted incentives, clearer benchmarks, or complementary investments in technology and advisory services.
Third, access matters. If agri-environment schemes systematically favour larger farms, policymakers need to consider whether administrative complexity, payment structures, or eligibility criteria create unnecessary barriers for smaller producers. Simplification and differentiation by farm type may be essential if schemes are to achieve broad environmental coverage.
Finally, evaluation should remain central. Environmental policy in agriculture operates under uncertainty and heterogeneity. Continuous monitoring and empirical assessment are necessary to distinguish symbolic compliance from substantive change.
Beyond Hungary
Although this study focuses on Hungarian wine farms, the broader lessons extend well beyond this case. Across Europe, agri-environment schemes operate in diverse institutional settings and farming systems. Their effectiveness depends not only on environmental ambition, but also on how incentives interact with farm structure, market pressures, and administrative capacity.
As CAP reforms increasingly emphasise environmental performance, there is a risk of overestimating what voluntary schemes can deliver on their own. Evidence-based adjustments—grounded in realistic assessments of farmer behaviour—are essential if policy objectives are to be met.
A final reflection
From a research perspective, this study reinforces a familiar but important point: policy intentions do not automatically translate into outcomes. Agri-environment schemes can work, but only under certain conditions and for certain objectives. Understanding these conditions is as important as expanding budgets or tightening targets.
If environmental policy is to remain credible, it must be informed by evidence that recognises both successes and limitations. In that sense, studies like this are not about criticising agri-environment schemes, but about improving them—so that they deliver real environmental change rather than well-intentioned promises.
Fertő, I., Csurilla, G., & Podruzsik, S. (2026).:
Assessing the impact of agri-environmental schemes on input use in Hungary’s wine sector: Implications for sustainability and policy design.
Environmental Development, 58, 101424.
https://doi.org/10.1016/j.envdev.2025.101424
