Farmer Compensation and its Consequences for Environmental Benefit Provision in the Higher Level Stewardship Scheme


  • Emmanuelle Quillérou,

  • Rob Fraser,

  • Iain Fraser

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    • Emmanuelle Quillérou was a PhD student at the Kent Business School, University of Kent, Canterbury, CT2 7PE, UK. E-mail: for correspondence. Rob Fraser is Professor of Agricultural Economics at the School of Economics of the University of Kent, and also Adjunct Professor of Agricultural and Resource Economics at the University of Western Australia. Iain Fraser is a Reader in Agri-Environmental Economics at the School of Economics, University of Kent. We are particularly grateful to the Editor-in-Chief, as well as to two anonymous reviewers for their very helpful comments on previous versions.


The Environmental Stewardship Scheme (ESS) provides payments to farmers for the provision of environmental services based on forgone agricultural income. Consequently, farmers with a relatively low opportunity cost of agricultural land will be particularly attracted to apply for entry into the ESS within a given payment region. This article tests whether there exists a significant relationship between Higher Level Stewardship (HLS) Scheme entry and agricultural yields. Empirically, HLS participation is found to be negatively related to cereal yields at the farm level. This could be associated with ‘auspicious selection’ of land into the Scheme, with greater ‘value for money’ provided by the higher entry of land with lower agricultural forgone income but higher environmental benefit within the region.