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This paper discusses the significance of volun- tary arrangements for the water and agricultural policies in the European Union. The current implementation of the Eu- ropean Water Framework Directive (WFD) and the reform of the Common Agricultural Policy (CAP) require new ap- proaches in water management. As many case studies have shown, co-operative agreements (CAs) between water com- panies, farmers and authorities can help to reduce environ- mental pressures on water bodies. The main reasons for that are: i) water companies are ready to advise and finan- cially support farmers in changing production methods; ii) changes of farming practices are tailored to the site-specific requirements; iii) farmers and water companies are interested in minimising the costs and environmental pressures as they benefit, for example, from modernization of farming me- thods, and reductions in cost of water treatment, and iv) vol- untarily agreed commitments to change farming practices are often stricter than statutory rules. Moreover, precautionary rather than remedial measures are preferred. Tackling dif- fuse pollution is one of the main concerns of the WFD. CAs can enhance the cost-effectiveness of actions within the pro- grammes of measures so that good water status is achieved by 2015. In CAs all relevant stakeholders, located in catch- ment areas of agricultural usage, can be involved. Thus, they can help to foster integrated water resources management. In particular, disproportionate costs of changing farming prac- tices can be identified. With regard to the recent CAP reform, financial support for farmers will be linked to compliance with environmental standards and further commitments. This concerns both direct payments and agri-environmental pro- grammes. The experience gained in CAs can provide infor- mation on best agricultural practices. Informed farmers are more ready to meet environmental requirements. Because CAs implement the most cost-effective changes in farming practice, it can be assumed that farmers will not face consid- erable costs due to the new EU water and agricultural poli- cies. Some examples of CAs are described and the signifi- cance of CAs in the implementation of the WFD and CAP reform will be highlighted. The article closes with an out- look on the needs of future research activities.

Co-operative agreements and the EU Water Framework Directive in conjunction with the Common Agricultural Policy