Review of Agri-Environment Indexes and Stewardship Payments

Agri-environment programs aim to secure environmental and social stewardship services through payments to farmers. A critical component of many agri-environment programs is an agri-environment index (AEI) used to quantify benefits and target investments. An AEI will typically comprise multiple indicators, which are weighted and combined using a utility function, to measure the benefit of investment options (e.g., projects, farms, regions). This article presents a review of AEIs with 11 case studies from agri-environment programs in the United States, Australia, and the United Kingdom. We identify a generic procedure used to define AEIs and explore the implications of alternative methodological approaches. We conclude that AEIs have become an extremely important policy instrument and make suggestions for their improvement.