Should Sustainable Development Rely on Financial Incentives? Lessons from the CTE Experiment in the Loire Valley

Abstract

The Contrat Territorial d’Exploitation (CTE), land use contract, was a significant experiment in France in the early 2000s. Farmers were offered financial incentives in exchange for more organic farming practices, as part of a sustainable development (SD) approach. Using a database of 462 farms in the Maine-et-Loire region, we tried to investigate the true motivation for signing a CTE: was it financial or ecological? In other words, were farmers simply maximising their profits or was there a broader objective? Our results indicate the former to be true. This means that a policy may encourage SD, but farmers cannot be expected to adhere to it without a financial incentive.