Conference Agenda

Natural grasslands (NG) are vital ecosystems that provide multiple ecosystem services (ES), including carbon sequestration, biodiversity conservation, soil health, and fodder provision. In Uruguay, NG constitute the predominant biome, yet an estimated 15\% has been lost over the past two decades due to agricultural intensification, afforestation, and the expansion of non-native pastures. Payments for Ecosystem Services (PES) offer a promising tool to realign private incentives with public environmental objectives. However, because farmers can undertake a wide array of actions and generate diverse outcomes relevant for NG conservation, a clearer understanding of their preferences for different PES designs is essential. This paper informs the design of effective PES schemes for NG conservation in by eliciting Uruguayan farmers’ preferences for both actions and outcomes directly linked to NG quality and biodiversity. While many PES programs have historically focused on activities (e.g., avoided deforestation), planners may benefit more from paying for realized environmental outcomes (e.g., carbon storage). Yet evidence on farmers’ preferences for activity- versus outcome-based schemes—and the trade-offs between them—remains limited. We contribute to this literature by estimating farmers’ willingness to accept (WTA) for different contract attributes that incorporate both types of incentives, with particular emphasis on NG quality and biodiversity. We used a discrete choice experiment with 335 farmers across Uruguay to characterize preferences for key PES attributes and to estimate WTA for each. All choice scenarios were adjusted by soil type to ensure comparability across heterogeneous production conditions while maintaining consistent trade-offs. We additionally explore heterogeneity in farmers’ preferences and assess whether targeted contracts or menu-based offerings may be more effective in this context. Our findings highlight that farmers do consider some level of conservation as privately beneficial, which is consistent with Uruguayan technical recommendations. Preferences heterogeneity among farmers that do already some conservation and those who don't is considerable, and highlights the relevance of fertilizers and non native seeds for production in the country. Identifying these farmers preferences can be a key input into policy options for native grasslands conservation.