Farmers as Custodian of a Territory

Summary

This type of contract compensates farmers for external activities to their farm production. The contract type has changed over time. However, the structure remained constant, and it includes two main parts: a) a fixed amount (payment) per farm for monitoring a water basin, b) a variable amount to reduce flood risk (and other risks like for example, erosion). The payment is incrementally based on the risk and the action taken to prevent it. The investigated contract solution is the second one, which was redesigned in accordance with farmers involved and the University of Pisa. The second contract solution reduced drastically the fixed components (previously 6000€) due to the shortage in the budget to compensate direct interventions in case of urgent actions required. The main novelties were the requirement of a monthly report containing the results of monitoring and indicating the most problematic area. In addition, after a weather alert, the farmers could signal the threat to water bodies using a dedicated Web App (IDRAMAP). Result-oriented: The second component might belong to the result-oriented category (theoretically). Practically the payment rewards the number of actions. Each action is paid based on the expected cost. In this case, it cannot be different because the public administration cannot pay farmers or other providers based on result, because they need some real documentation (invoice etc.) to justify the public expenditure. Besides, a public authority does not know ex-ante the source of threats (i.e. number of weather alerts and severity of rain). So they need a flexible system to ensure the management of river basinss. Indirect effects: - An incentive to increase farmer’s investments and farmers modernization. - An incentive to better know the territory as well as to increase the cooperation with the public agency.

Data and Facts - Contract

Contract features combination: The contract is an agreement between the UC of Serchio Valley and 27 farmers selected on the basis of two criteria: a) proximity to the water bodies and the capability to undertake necessary actions. Formally, there is a public call asking farmers the willingness to be involved in the project. The agreement includes a description of actions to be taken in their area managed as well as the first refusal for further activities when needed. The deal includes a fixed amount for monitoring activities and a variable amount based on agreed actions and new actions (based on the right of first refusal or fiduciary piecework). The fixed payment is calculated on the basis of 250 € per years = 5 weather alerts per year with a cost of 50€ per each monitoring activity. The beneficiaries must prepare and submit to UM a monthly report containing the outcome of monitoring activities on their management of water bodies. The variable component is based on direct commitment due to a previous agreement. The farmers must respect the foreseen timing. An additional payment for a large intervention can be paid by measure 226 or RDP of Regione Toscana (RT). 
Participation: 27 farmers were involved. They cover about 40% of the hydrological bodies area. Currently, there are no reasons to try to extend to another subject (i.e. NGOs, citizens due to lacks in types of equipment to perform the required actions). 
Involved parties: Farmers received the payments and in turn, had to ensure both monitoring activities, prevention actions and required additional actions. Citizens and other farmers are less exposed to flood risks, and benefit from effective water management. An additional problem about keeping minimum water level for Massaciuccoli Lake arose in recent years. 
The benefits for participating in the contract solution: Farmers have broadened their farm activities and received payments in turn for ecosystem services. In addition, they were able to increase investment and keep farm active. The UM outsourced an activity to actors with higher knowledge of forestry and agricultural condition on the territory.
Management requirements for farmers: In addition, each contract is differentiated on the basis of preventing activities which are required and are paid with the variable components. These activities include indications for cutting strategies, use of specific sustainable products, grazing management, cleaning of water bodies. 
Controls/monitoring: - Use of ICT and a formal delegation of activities by local technical office. - Numbers of weather alerts. - Preparation of a monthly report containing information on the main risk observed. - Respect the time of the work described in the contractual agreement for the actions. 
Conditions of participation: The UM opened a public call for interest in the outsourcing activities. The call allowed to identify interested farms in supporting the public administration on these services. Then after having signed an agreement (convenzione) the UM are allocated them based on proximity to the water bodies and on the effective capability to implement required action. Due to the few farmers interested the UM decided to not apply additional preference criteria. In case of non-compliance, the UM refuses to renew the agreement. Actually, the UM said that all farmers were in compliance with the commitments. 
Legal status of the contracting parties: UM is a public association with tasks also on land reclamation and irrigation. The other contracting party are farmers, with no specific legal status requirements. 
The contracting area: The contracting area covers water bodies plus specific activities performed on each farm. Hence, in several cases, the farms are in charge to monitor an area outside they operated area. In the previous contract, the fixed payment was proportional to the area monitored, but this linkage was removed in the investigated contract. 
Renewal / termination: The UM requires a monthly report containing the results of monitoring activities and one additional report after each weather alert. The additional report contains emerging concerns, not directly observed in the previous report. This report constitutes the basis for asking for direct interventions. The UM was flexible in judging the quality of the monthly report, especially during the earlier phases, but requires a rigid timing for both small and large activities directly committed.
Risk/uncertainties of participants: Payments decoupled by markets, the source of uncertainties are the amount of investment required and the number of weather alerts per year. 
Links to other contractual relationships: The only requirement was to respect the law about security of working conditions (i.e. use of specific equipment etc.).

Context features

Landscape and climate: The area investigated is very rainy, mainly in the spring and autumn. The winter is often rainy with snow often above 1500 meters. These conditions combined with the abandonment of grazing activities along the internal area can create spontaneous vegetation and a continuous growing of the unmanaged forest. These conditions, besides quite a steep slope, can create a lot of pressure on water management. 
Farm structure: No specific requirement, but enrolled farmers with equipment enable to support action on water bodies.

Success or Failure?

The custodian was a successful contract solution.

Reasons for success :

Bottom-up programming with involving of farmers.

SWOT analysis