Development of incentives for the promotion of water and nutrient management techniques in agricultural catchments based on the Sustainable Development Goals. Deliverable D6.4 of the EU Horizon 2020 project OPTAIN.

Deliverable report D6.4 of the EU Horizon 2020 Project OPTAIN (Grant agreement No. 862756) The report analyses how policy instruments can better promote Natural Small Water Retention Measures (NSWRMs) across diverse European agricultural catchments. It situates NSWRMs within the wider EU policy landscape, including the Common Agricultural Policy, Water Framework and Nitrates Directives, Natura 2000, and emerging Water Resilience Strategy. The report assesses which instruments are currently used, where funding and design are inadequate, and proposes new or improved incentive schemes and combinations of instruments. Summary European agriculture faces a number of interrelated environmental problems, including increasing water scarcity and flood risk, deterioration in water quality and soil fertility, loss of biodiversity and frequent hydrogeological natural disasters because of climate change. In this context, Natural Small Water Retention Measures (NSWRMs) have gained considerable importance as multifunctional, nature-based measures due to their abilities to improve water and nutrient retention in rural and agricultural landscapes. NSWRMs encompass a broad set of agricultural land management practices, linear and areal structural measures. Overall, they are well suited to diverse European farming systems and can contribute simultaneously to climate adaptation, water resilience, and environmental objectives, at field, farm and catchment scales. Despite their position within the wider EU policy landscape (Common Agricultural Policy, Water Framework and Nitrates Directives, Natura 2000 network, and the emerging Water Resilience Strategy) and strong evidence of their effectiveness, NSWRMs remain unevenly implemented or underutilized due to persistent shortcomings in the existing policy frameworks and support systems, as well as technical limitations. This report examines how the current policy instruments promote the implementation of NSWRMs, and how they could be improved to better support their wider uptake in 14 European agricultural catchments across ten European countries, which represent a wide range of biogeographical and biophysical conditions, farming systems and governance settings. A joint fact-finding and co-creation approach was applied, stemming from previous OPTAIN activities and involving multiple stakeholders: farmers, land managers, advisors, researchers and policy representatives. The methodology used combines quantitative inputs - including data on the effectiveness of NSWRMs, costs and the adequacy of financial and technical support for implementation - with qualitative methods to develop guidelines for designing new and effective incentives. The whole process enables capturing how policy instruments and incentives are perceived, interpreted, and implemented in practice. At the same time, it is acknowledged that perspectives of non-practitioners and operators outside case study areas may be underrepresented, potentially limiting insights into broader systemic barriers to uptake. This report provides a systematic review of the three categories of focal NSWRMs identified as relevant in the case study sites: land management measures (i.e., conservation tillage, crop rotation, cover crops, drought resistant crops, early sowing, grassing of recharge areas, and meadows and intercropping), structural linear measures (buffer strips, buffer zones and grassed waterways), and structural areal measures (afforestation, constructed wetlands, controlled drainage, floodplain restoration, retention/detention ponds and terracing). The report summarizes the effectiveness of these measures, their direct and indirect costs, and the existing support systems/schemes. The analysis confirms that, across all categories, individual NSWRMs and their combinations show the potential to deliver substantial hydrological and environmental benefits and are cost-effective over longer time horizons. However, their uptake is strongly influenced by upfront costs, maintenance requirements and opportunity costs, but also by perceived risks, administrative complexity and burden. The review of policy instruments reveals a fragmented landscape. Existing policy support is uneven. NSWRMs are supported and promoted through a mix of legally mandated requirements, conditionality mechanisms under the Common Agricultural Policy, voluntary agri-environmental schemes, project-based fundings and advisory or information-based tools. These instruments often lack sufficient funding, long-term commitments, or alignment with other environmental targets. The assessment of policy instruments indicates that the current arrangements are in general insufficient to support the widespread and long-term implementation of NSWRMs. The mandatory requirements and conditionality set out in agricultural policies tend to establish and focus on minimum standards and rarely deliver functional outcomes for hydrological conditions. Voluntary funding schemes often suffer from tight budgets, short contract terms and payment levels that do not adequately compensate practitioners for the perceived risks, increased costs or lost revenue. Information and advisory instruments (i.e. soft incentives) play a key role in supporting the implementation of NSWRMs but can be largely ineffective if not appropriately coupled with complementary financial or regulatory instruments. Policy instruments remain fragmented across sectors and governance levels, with a weak coordination between agricultural, water and nature conservation objectives. A central limitation is the lack of coherent and coordinated catchment-specific policy mixes. Moreover, supporting mechanisms often fail to support long-term maintenance, collective action, or spatial targeting of individual or combined NSWRMs, which are crucial to enhance their effectiveness well beyond the farm scale. Henceforth, the wider uptake and the effective implementation of NSWRMs require integration of clear regulatory baselines with sufficiently attractive and reliable incentives. These must be reinforced by well-resourced advisory services and improved spatial targeting. Equally important is the provision of long-term, predictable funding to support maintenance activities and collective action, which are essential for sustaining benefits over time. Reducing both practitioner risk and administrative complexity emerges as a key prerequisite for higher participation rates by potential practitioners. There are still major knowledge gaps about why measures are not adopted, how long-term costs and benefits vary between regions, and how effective integrated instrument packages are in practice. Addressing these gaps would strengthen the evidence base for policy design and facilitate more effective strategies to unlock the full potential of NSWRMs as a cornerstone of resilient and sustainable European agricultural systems.