Abstract
Despite the increasing interest from both policy makers and scholars in the collective management of natural resources in the rural sector, the literature has not covered many aspects of the incentives targeting collective actors. In this article, we analyze how embedding minimum participation rules in rural policies affect the distribution of benefits of a group of players that cooperate. The article applies the Shapley Value and the Nash–Harsanyi solution, two of the key solutions of cooperative game theory, to an incentive scheme in Emilia-Romagna (Italy) to support the construction of collective reservoirs for irrigation water. Results show that rules on the minimum storage capacity and on the minimum number of users affect the benefit distribution in opposite directions. The main conclusion of the article is that minimum participation rules should be carefully designed if welfare distribution is an issue. However, further studies are required to have a comprehensive assessment of minimum participation rules within rural policies.
Highlights
The sustainability of the agricultural sector partially depends on the conservation of key natural resources, such as biodiversity, ecosystem services and freshwater, that are threatened by the increasing demand for food [1]
A collective approach has been advocated for policies focusing on the interconnection between agriculture and natural resource management given that environmental protection exhibits different degrees of non-rivalry and non-excludability and it is characterized by thresholds and spatial factors that require the coordination of farmers [4]
Qt = 32,344 any singleton coalition do not enroll in the Rural Development Plan (RDP) and the policy benefits are only ensured by joining bigger coalitions
Summary
The sustainability of the agricultural sector partially depends on the conservation of key natural resources, such as biodiversity, ecosystem services and freshwater, that are threatened by the increasing demand for food [1]. A collective approach has been advocated for policies focusing on the interconnection between agriculture and natural resource management given that environmental protection exhibits different degrees of non-rivalry and non-excludability and it is characterized by thresholds and spatial factors that require the coordination of farmers [4]. This topic is increasingly relevant for the design of agri-environmental policies, especially in the European Union (EU), which is envisioning and promoting the coordination among farms of the application of environmental efforts, both in the first pillar (for the collective compliance of the “greening” constraints associated with the CAP direct payments) (Art. 46, Regulation (EU)
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