The Rural Environmental Protection Scheme (REPS) was introduced in Ireland as a result of an EU directive to encourage farmers to farm in an environmentally friendly way and to try to reverse the emphasis on intensive farming practices encouraged by the Common Agricultural Policy. The scheme compensates farmers for carrying out environmentally friendly farming activities and according to Hynes and Murphy, 2002, is designed to reduce negative externalities, such as water pollution, and enhance positive externalities, such as maintaining the visual aspect of the rural landscape. The impact of the scheme has been disappointing; uptake is predominantly by the smaller extensive farmers because it offers them the greatest reward and there has only been a marginal reduction in the national use of fertilizers and pesticides.
Where has the scheme gone wrong? Why has this command-and-control mechanism not worked? The REPS scheme was implemented on a voluntary basis and assumes that the whole country is homogenous. Intensive farming is still the most profitable but is also the most polluting and is concentrated in specific areas which were not targeted by the scheme. Because payments were capped at 40ha there was no incentive for large intensive farmers to join the scheme as the environmental obligations applied to all their hectares even though they were only compensated for 40ha.
The scheme, now in its fourth five year cycle, has been revised and made more attractive. But, this scheme cannot last forever and according to Hynes and Murphy, 2002, REPS farmers have no greater awareness of the environment than non-reps farmers. So, the question is has this scheme promoted sustainable development? Will farmers continue to farm environmentally when the scheme ends and they are no longer receiving payments?