22 June 2017Biodiversity offsetting (BO) is increasingly used in environmental policies as a way to halt biodiversity losses caused by the development of infrastructure and urbanization. Ecological gains for offsets have so far mainly been obtained through restoration activities conducted on agricultural land specifically acquired for this purpose by developers. This approach however meetsgrowing technical difficulties due to land availability and social conflicts with farmers. The purpose of this paper is to analysethe opportunity of implementing a new approach to conduct biodiversity offsets through the use of agri-environmental schemes that we call agri-environmental biodiversity offset schemes (ABOS). This paper reviews the interests, limits and challenges oftheuseof ABOS in offsetting policies byexaminingtwo major issues: (1) the acceptability of offsetting contracts by farmers, and (2) the effectiveness of ABOS design and implementation. Based on the case-study of a major BO programme following the construction of a big railway bypass in the South of France, the article empiricallyassesses these issues through asurvey carried out with 145 farmers. The results revealthat the main determinants of acceptability are: i) the usual economic factors -farmers with lowest compliance levels and opportunity costs, as well as farms facing economic difficulty,are more likely to adopt-, and ii) social factors –the importance given to other farmers’ decisionand the feeling that this decision is accepted by farmers’ representatives. In terms of effectiveness, ABOS is shown to be effective in meeting legal requirementsof the developer,but concernsare raised about realecological benefits due to issues of additionality, permanence of land use change, and non-compliance with contract requirements. We particularly highlight problems with contract enforcement –especially due to weak sanctions and monitoring –and farmers’ selection that do not allow minimizing moral hazard and adverse selection, which are inherently attached to agri-environmental schemes. These resultsraise questions about the relevance ofdeveloping ABOS in offsetting policies, and lead us to suggest policy improvements.