17.3Some Economic Instruments

preserving cultural landscapes. In terraced landscapes, eco-labelling can be challenging due to the large presence of unprofessional farmers, who lack the technological and economic means necessary to follow the standards of eco-labels.

Social innovation in eco-labelling mechanisms has been promoted by civic associations in the UNESCO World Heritage Site of the Amalfi Coast (Italy) for the recovery and regeneration of the terraced landscape.

A bottom-up project (Effetto Costiera) has connected small local farmers with ethical consumers groups (Ethical Purchasing Groups) in the territory surrounding the UNESCO site. Consumers’ groups can buy local products from terraces directly from local farmers, creating a market for the residual products from self-consumption.

Local associations are in charge of ‘labelling’ the products and collect them from local farmers. All actors (farmers, intermediary associations and consumers) operate in a “network of trust” that enables sharing economy practices. The activity of the associations ensures additional income to farmers and healthy Km0 products to consumers, creating circular beneficial loops at local level.

The opportunities of the sharing economy have been exploited in the Amalfi Coast for preserving local agro-biodiversity. A crowdfunding campaign to recover the autochthonous seeds of a special variety of tomato (Fiascone) has been promoted in 2016, resulting in a first experimental production and the launch of an agro-business start-up for its commercialization.

Impact assessment and evaluation tools can support these initiatives by providing the necessary evidence base for upscale and replication of experimental tools, and for informing policy choices towards the operationalization of the circular economy in terraced landscapes.

17.3.3Payments for Ecosystem Services Promoting Sustainable Farming Practices

The term payments for ecosystem services (PES) is used to describe economic schemes in which the beneficiaries, or users, of ecosystem services provide direct payment to the stewards, or providers (FAO 2011; Smith et al. 2013). PES often involve a series of payments to land managers in return for a guaranteed flow of ecosystem services (or, more specifically, for management actions likely to enhance their provision).

This mechanism is a type of subsidy that aims to protect ecosystem services by providing an economic incentive by the beneficiaries—directly and voluntarily—to land managers to adopt land use or management practices favourable to the protection of ecosystem services. According to the OECD (2010), there were already more than 300 PES or PES-like programmes in place by 2010 at national, regional and local levels. PES schemes are considered a viable model for supporting rural livelihoods integrating agri-environmental subsidies (Wynne-Jones 2013; Ingram et al. 2014).

In north-eastern France, the Vittel company (Nestlé Waters), world leader in mineral water bottling, developed a payment scheme to compensate local farmers who adopted sustainable farming practices, which reduced nitrate contamination in the aquifer, thus reducing the cost to the company for bottling water in that area.

Incentives, in the forms of contracts between the company and farmers, were structured according to the cost structure and location of the individual farms, and the link between ecosystem service (water filtration and maintenance of adequate levels of nitrate in the plant sub-root system) and management practices had been established scientifically at the sub-basin and plot level.

Despite the difficulties of balancing conflicting interests (Déprés et al. 2008), in ten years all 26 farms in the area had adopted the new farming system; 1700 ha of intensive crop cultivation were converted to more sustainable farming, and 92% of the sub-basin enhanced its capacity of provision of the ecosystem service related to freshwater. A clear indicator of success has been the request from young farmers who have taken over the family farm to enter into 30-year contracts (Perrot-Maître 2006).

The experience of Vittel shows that PES is a complex tool that requires the consideration of scientific but also social, economic, political, institutional relationships and conflict-solving ability (Perrot-Maître 2006). The ability to support farmers’ income and finance the technological changes needed to shift to sustainable farming was an important element of success, but the key factor of success was not financial. Trust-building, through the creation of an intermediary institution (locally based and led by a “champion” sympathetic to the farmers’ cause); the development of a long-term participatory process to identify alternative practices and a mutually acceptable set of incentives; the ability to link incentives to land tenure and debt cycle issues and to substitute the traditional technical and social support networks with new ones, was all fundamental conditions of success (Perrot-Maître 2006; Smith et al. 2013).

17.3.4 Pay for Action and Pay for Result Mechanisms

“Pay for action” and “Pay for result” mechanisms have been experimented in the “Burren Programme” on Ireland’s western Atlantic coastline, to recover an area internationally recognised for its cultural and natural heritage, which includes dry-stone walls, traditional farming and pastoralism, and priority habitats listed in the Habitats Directive.

Recent years have seen the withdrawal, restructuring and reduction of farming activity, which has led to the slow degradation of priority habitats due to under-grazing, abandonment and loss of land management traditions.

The Burren LIFE project (2005–2010) started the regeneration process. Demonstrative actions were implemented involving 20 pilot farms, with the aim of recover priority habitats and the cultural built heritage and increase farmers’ income (BLP 2010). Burren LIFE promoted an extensive survey to assess the willingness to