A topical policy goal is to design agri-environmental schemes that not only protect the environment but also foster agricultural production. This paper contribute with new knowledge towards this ambition, exploring the role of agri-environmental schemes for farm survival. Employing rich farmlevel data on Swedish farms during 2001-2014, we explore farm survival using discrete-time hazard models and finds a significant association between agri-environmental schemes and farm survival.

More specifically, the results suggests that participants are more likely to survive than farms without an agri-environmental scheme commitment and more extensive commitments favors increased survival up to a point when the commitment becomes too large in relation to other commitments and resources of the farm. Robustness analysis across subsamples of farms supports the finding that agrienvironmental schemes are correlated with survival also for different groups of farms. Together, these results suggests that the agri-environmental schemes are important for farmers, and not only as a means to enable environmental protection. Consequently, this study contributes to policy, underlining the importance to encompass consequences beyond environmental concerns when assessing the overall benefits of the agri-environmental schemes.