Liechtenstein's Ecological Compensation Payments — Two Decades of Tracked Farmland Habitat Growth

Liechtenstein is a 160 km² Alpine microstate where 42% of the national territory is forested and elevation ranges from about 430m to over 2,600m, supporting habitat gradients that national reporting to the Convention on Biological Diversity describes as rare or unique at the European level. In 2023, about 34% of the country's 6,183-head cattle herd (2,097 animals) was summered on Alpine pastures.
Under Liechtenstein's Act on Direct Subsidies and its Ordinance on ecological incentives for eco- and animal-friendly agricultural production (the "Compensation Act"), the state pays farmers for services not remunerated by the market: managing designated "ecological compensation areas" — extensively used meadows, litter meadows, hedgerows with herbaceous borders and wildflower strips — meeting Proof of Ecological Performance (PEP) standards, and converting to certified organic production. In 2023, 43.3% of the country's 97 registered farms (42 farms) were managed under organic guidelines, one of the highest shares among Alpine states.
National statistics (Liechtenstein's Statistikportal) track the resulting land-use change over two decades: ecological compensation area rose from 13.5% of agricultural land in 2000 to 16.9% in 2020, already above an official benchmark of roughly 15%. By 2024 the area stood at 654 hectares — 615 ha of extensively used meadows, litter areas and hedges with herbaceous borders, 38 ha of moderately intensive meadows and 1 ha of wildflower strips — essentially flat on the previous year after averaging about +8.9 ha per year over 2014–2023, suggesting the expansion phase is levelling off near the policy target. Reported 2023 income contributions included CHF 2,455,804 for roughage-consuming livestock (the largest single category, 39.5% of contributions) and a CHF 1,109,094 basic contribution.
The scheme closely mirrors Switzerland's longer-running federal ecological-compensation model, to which Liechtenstein is linked through its customs and economic union with Switzerland, giving it a well-precedented, transferable design. It is a slow, incremental land-use programme rather than a dramatic restoration story, and its continuation depends on national direct-payment budgets rather than market-based ecosystem-service buyers; no separate data on carbon or water/soil outcomes specific to the scheme were located.

Read the full analysis: https://www.llv.li/en/individuals/recreational-environmental-and-animal-management/agriculture/promotion