Economic and environmental impact of the CAP mid-term review on arable crop farming in South-western France
AbstractThe issue addressed in this paper is whether implementation of the CAP MTR, (involving decoupled payments reduced by "modulations" and subject to cross-compliance measures) can be effective in improving the environmental impact of arable farming. The focus is on two French cross-compliance measures (compulsory buffer strips along rivers and crop diversity). A farm-level bio-economic model incorporating yield uncertainty is built and adjusted to represent two typical arable farms in the Southwest of France. The model also combines agro-environmental indicators. The results indicate that a simple decoupling of direct payments, without cross-compliance measures, has no impact on allocations between different crops. If cross-compliance measures are imposed, a small reduction in the cultivated area of irrigated crops is observed. The penalty levied (1% of the total subsidy paid) when farmers do not comply with the "buffer strips" requirement is sufficient for both farm-types. Decoupling and modulation result in a fall in the total gross margin of around 3%, principally because of the 5% modulation rate, while the "buffer strips" requirement leads to a further decrease of around 1%. Moreover, this requirement improves the environmental indicators at the farm level.
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Bibliographic InfoArticle provided by Elsevier in its journal Ecological Economics.
Volume (Year): 68 (2009)
Issue (Month): 5 (March)
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Web page: http://www.elsevier.com/locate/ecolecon
CAP mid-term review Cross-compliance MP (Mathematical Programming) model Agro-ecological indicators Arable farms;
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