Definition
Result-based contracts connect payments to environmental effects or the amount of AECPGs provided (environmental outcomes and benefits). In result-oriented agreements, the payment may depend on a simplified measurement based on models or a point system linking a set of practices to expected outcomes. In the latter, the difference between result-based and action-based is more blurred.
Design Guidelines
For result-based payments, it is necessary first to identify the availability, source, and type of funding and check if this contract type can comply with funding rules – exceptionally if it is foreseen to use CAP funding. Then the availability of knowledge, skills, and institutional capacity must be considered as the identification of suitable indicators and sound monitoring are essential for success. It is crucial to assess whether the target farmers’ expected response and uptake will be sufficient to achieve the environmental objectives and, if relevant, whether farmers will cooperate with other stakeholders to define and measure the result indicators. It is also important to consider how to pay for the objectives achieved. When designing result-based contracts, the decision tree flowchart could be used as a support (Fig 6).
Fig 6 Decision tree for designing results-based contracts
