Policy impact analysis of penalty and reward scenarios to promote flowering cover crops using a business simulation game

Abstract

Due to an increasing number of biogas plants and the positive qualities of maize as a biogas substrate, the cultivation of silage maize has risen in Germany. However, there are still various reasons for the limitation of the cultivation area of silage maize. Hence, policymakers are currently discussing various alternative biogas substrates and ways to promote their cultivation. One possible alternative is the use of special flowering cover crops with additional ecological benefits. Using a business simulation game conducted with farmers, the present study investigates whether the implementation of a reward and penalty policy will improve the uptake of flowering cover crops in the production programs of farmers. The results indicate that the implementation of these policy measures was followed by a significant increase in the cultivation area of flowering cover crops. The penalty policy leads to a stronger increase in the size of the cultivation area of flowering cover crops than the reward policy, even though the policies have the same income effect for farmers. Furthermore, the results reveal that the cultivation of flowering cover crops is influenced by various socio-demographic variables.