IDEAS home Printed from https://ideas.repec.org/a/bla/canjag/v66y2018i3p359-377.html
   My bibliography  Save this article

The Potential for Cross‐Compliance in Canadian Agricultural Policy: Linking Environmental Goals with Business Risk Management Programs

Author

Listed:
  • James Rude
  • Alfons Weersink

Abstract

Environmental cross‐compliance links agricultural program payments to producer commitments to achieve agri‐environmental policy goals. The objective of this study is to determine the feasibility of using cross‐compliance to achieve environmental goals in a Canadian policy context. While Canadian policy makers have flirted with cross‐compliance, with the exception of phosphorus regulations for Quebec hog farms, they have never adopted this approach. The potential for effective cross‐compliance depends on producer participation, producer compliance with regulations, environmental performance, and overall welfare implications. This study reviews the application of cross‐compliance in the United States and EU with regard to the potential application to Canadian agriculture. Policy options are considered which link current business risk management (BRM) programs to alternative environmental regulations (wildlife habitat preservation, nutrient management plans, and beneficial management practices for nutrient management). In general, individual Canadian agricultural support program do not provide sufficient incentives for farmers to participate in cross‐compliance. However, if support programs are combined, it is better to link programs that redistribute income with environmental programs than to link agriculture programs that already address specific market failures. L'écoconditionnalité lie les paiements de programme agricole aux engagements des producteurs à atteindre des objectifs agroenvironnementaux. Le but de cette étude est de déterminer la faisabilité de l'utilisation de l′écoconditionnalité pour atteindre des objectifs environnementaux en contexte politique canadien. Malgré avoir effleuré l′écoconditionnalité, les décideurs politiques canadiens n'ont jamais adopté cette méthode, à l'exception des règlements concernant le phosphore en place au Québec et qui concernent les fermes porcines. Le potentiel pour l′écoconditionnalité efficace dépend de la participation des producteurs, leur capacité de se conformer aux règles, la performance environnementale, et les retombées sur le bien‐être en général. Cette étude propose l'examen de l'application de l′écoconditionnalité aux États‐Unis et au sein de l'Union européenne en matière du potentiel d'application en milieu agricole canadien. Des options politiques reliant les programmes de gestion des risques de l'entreprise à d'autres règlements environnementaux sont présentées (la préservation des habitats sauvages, les plans de gestion des nutriments, et les pratiques bénéfiques de gestion pour la gestion des nutriments). En général, les programmes individuels de soutien agricole canadien ne fournissent pas assez de mesures incitatives pour les fermiers qui souhaitent participer à l′écoconditionnalité. Par contre, si les programmes sont regroupés, il vaut mieux relier des programmes qui redistribuent les revenus avec les programmes environnementaux, plutôt que de combiner des programmes qui se répondent déjà à un échec précis du marché.

Suggested Citation

  • James Rude & Alfons Weersink, 2018. "The Potential for Cross‐Compliance in Canadian Agricultural Policy: Linking Environmental Goals with Business Risk Management Programs," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 66(3), pages 359-377, September.
  • Handle: RePEc:bla:canjag:v:66:y:2018:i:3:p:359-377
    DOI: 10.1111/cjag.12174
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/cjag.12174
    Download Restriction: no

    File URL: https://libkey.io/10.1111/cjag.12174?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Anastasia Lintner & Alfons Weersink, 1999. "Endogenous Transport Coefficients: Implications for Improving Water Quality from Multi-Contaminants in an Agricultural Watershed," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 14(2), pages 269-296, September.
    2. Baylis, Kathy & Peplow, Stephen & Rausser, Gordon & Simon, Leo, 2008. "Agri-environmental policies in the EU and United States: A comparison," Ecological Economics, Elsevier, vol. 65(4), pages 753-764, May.
    3. James Rude & Alan Ker, 2013. "Transfer Efficiency Analysis of Margin-Based Programs," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 61(4), pages 509-529, December.
    4. Adam Ozanne & Tim Hogan, 2001. "Moral hazard, risk aversion and compliance monitoring in agri-environmental policy," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 28(3), pages 329-348, October.
    5. Claassen, Roger & Breneman, Vincent E. & Bucholtz, Shawn & Cattaneo, Andrea & Johansson, Robert C. & Morehart, Mitchell J., 2004. "Environmental Compliance In U.S. Agricultural Policy: Past Performance And Future Potential," Agricultural Economic Reports 34033, United States Department of Agriculture, Economic Research Service.
    6. Rob Fraser, 2002. "Moral Hazard and Risk Management in Agri‐environmental Policy," Journal of Agricultural Economics, Wiley Blackwell, vol. 53(3), pages 475-487, November.
    7. Chad Lawley & Charles Towe, 2014. "Capitalized Costs of Habitat Conservation Easements," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 96(3), pages 657-672.
    8. Claassen, Roger, 2004. "Have Conservation Compliance Incentives Reduced Soil Erosion?," Amber Waves:The Economics of Food, Farming, Natural Resources, and Rural America, United States Department of Agriculture, Economic Research Service, pages 1-8, June.
    9. Seguin, Bob, 2012. "The Political Economy of Risk Management Programming in Canada: Strategic Commentary on BRM and RMP Policy and Programs," Miscellaneous Publications 289965, George Morris Center.
    10. Wanhong Yang & Alfons Weersink, 2004. "Cost-effective Targeting of Riparian Buffers," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 52(1), pages 17-34, March.
    11. Besanko, David, 1987. "Performance versus design standards in the regulation of pollution," Journal of Public Economics, Elsevier, vol. 34(1), pages 19-44, October.
    12. Predrag Rajsic & Alfons Weersink & Markus Gandorfer, 2009. "Risk and Nitrogen Application Levels," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 57(2), pages 223-239, June.
    13. Polinsky, Mitchell & Shavell, Steven, 1979. "The Optimal Tradeoff between the Probability and Magnitude of Fines," American Economic Review, American Economic Association, vol. 69(5), pages 880-891, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ashton, Lisa, 2022. "A framework for promoting natural climate solutions in the agriculture sector," Land Use Policy, Elsevier, vol. 122(C).
    2. Hongyu Wang & Xiaolei Wang & Apurbo Sarkar & Fuhong Zhang, 2021. "How Capital Endowment and Ecological Cognition Affect Environment-Friendly Technology Adoption: A Case of Apple Farmers of Shandong Province, China," IJERPH, MDPI, vol. 18(14), pages 1-16, July.
    3. Peter Slade, 2020. "Business risk management programs under review," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 68(3), pages 263-270, September.
    4. Lark, Tyler J., 2020. "Protecting our prairies: Research and policy actions for conserving America’s grasslands," Land Use Policy, Elsevier, vol. 97(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Rob Fraser, 2013. "To Cheat or Not To Cheat: Moral Hazard and Agri-environmental Policy," Journal of Agricultural Economics, Wiley Blackwell, vol. 64(3), pages 527-536, September.
    2. Yano, Yuki & Blandford, David, 2008. "Use of Penalties and Rewards in Agri-Environmental Policy," 82nd Annual Conference, March 31 - April 2, 2008, Royal Agricultural College, Cirencester, UK 36873, Agricultural Economics Society.
    3. Kim, Youngho & Lichtenberg, Erik & Newburn, David, 2022. "Payments and Penalties in Ecosystem Services Programs," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322103, Agricultural and Applied Economics Association.
    4. Rob Fraser, 2012. "Moral Hazard, Targeting and Contract Duration in Agri‐Environmental Policy," Journal of Agricultural Economics, Wiley Blackwell, vol. 63(1), pages 56-64, February.
    5. Lapierre, Margaux & Le Velly, Gwenolé & Bougherara, Douadia & Préget, Raphaële & Sauquet, Alexandre, 2023. "Designing agri-environmental schemes to cope with uncertainty," Ecological Economics, Elsevier, vol. 203(C).
    6. Meijerink, Gerdien W., 2007. "If services aren't delivered, people won't pay: the role of measurement problems and monitoring in Payments for Environmental Services," 106th Seminar, October 25-27, 2007, Montpellier, France 7948, European Association of Agricultural Economists.
    7. Calvet, Coralie & Le Coent, Philippe & Napoleone, Claude & Quétier, Fabien, 2019. "Challenges of achieving biodiversity offset outcomes through agri-environmental schemes: Evidence from an empirical study in Southern France," Ecological Economics, Elsevier, vol. 163(C), pages 113-125.
    8. Vergamini, Daniele & White, Benedict & Viaggi, Davide, 2015. "Agri-Environmental Policies design in Europe, USA and Australia: is an auction more cost-effective than a self-selecting contract schedule?," 2015 Fourth Congress, June 11-12, 2015, Ancona, Italy 207357, Italian Association of Agricultural and Applied Economics (AIEAA).
    9. Ozanne, Adam & White, Benedict, 2003. "Agri-environment Policy Design With Hidden Information and Hidden Action: Input Quotas vs Input Charges," 2003 Conference (47th), February 12-14, 2003, Fremantle, Australia 58196, Australian Agricultural and Resource Economics Society.
    10. Thomas Coisnon & Walid Oueslati & Julien Salanié, 2013. "Spatial targeting of agri-environmental policy and urban development," Post-Print halshs-00949730, HAL.
    11. Ozanne, Adam & White, Benedict, 2008. "Hidden action, risk aversion and variable fines in agri-environmental schemes," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 52(2), pages 1-10.
    12. Cho, Wonjoo & Blandford, David, 2015. "Bilateral information asymmetry and irreversible practice adoption through agri-environmental policy: an application to peat land retirement in Norway," 89th Annual Conference, April 13-15, 2015, Warwick University, Coventry, UK 204212, Agricultural Economics Society.
    13. Ferraro, Paul J., 2008. "Asymmetric information and contract design for payments for environmental services," Ecological Economics, Elsevier, vol. 65(4), pages 810-821, May.
    14. Lankoski, Jussi E. & Lichtenberg, Erik & Ollikainen, Markku, 2008. "Agri-environmental program compliance under heterogeneous conditions," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 44381, European Association of Agricultural Economists.
    15. Kentaro Kawasaki & Takeshi Fujie & Kentaro Koito & Norikazu Inoue & Hiroki Sasaki, 2012. "Conservation Auctions and Compliance: Theory and Evidence from Laboratory Experiments," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 52(2), pages 157-179, June.
    16. Bertoni, D. & Curzi, D. & Iacus, S. & Olper, A., 2018. "Estimating the Causal Effect of Green Payments in Agriculture: The Coarsened Exact Matching," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277381, International Association of Agricultural Economists.
    17. Thomas Coisnon & Walid Oueslati & Julien Salanié, 2012. "Agri-environmental policy and urban sprawl patterns: A general equilibrium analysis," Working Papers halshs-00753221, HAL.
    18. Sauer, Johannes & Walsh, John, 2011. "ESS versus NVZ – The Cost-Effectiveness of Command-and-Control versus Agreement Based Policy Instruments," 85th Annual Conference, April 18-20, 2011, Warwick University, Coventry, UK 108963, Agricultural Economics Society.
    19. Alban Lika & Francesco Galioto & Davide Viaggi, 2017. "Water Authorities’ Pricing Strategies to Recover Supply Costs in the Absence of Water Metering for Irrigated Agriculture," Sustainability, MDPI, vol. 9(12), pages 1-16, November.
    20. Barreiro-Hurlé, Jesús & Espinosa-Goded, Maria & Dupraz, Pierre, 2008. "Does Intensity Of Change Matter? Factors Affecting Adoption In Two Agri-Environmental Schemes," 107th Seminar, January 30-February 1, 2008, Sevilla, Spain 6458, European Association of Agricultural Economists.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:canjag:v:66:y:2018:i:3:p:359-377. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/caefmea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.