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Economic and environmental impact of the CAP mid-term review on arable crop farming in South-western France

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  • Mosnier, Claire
  • Ridier, Aude
  • Kphaliacos, Charilaos
  • Carpy-Goulard, Françoise

Abstract

The 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 Info

Article provided by Elsevier in its journal Ecological Economics.

Volume (Year): 68 (2009)
Issue (Month): 5 (March)
Pages: 1408-1416

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Handle: RePEc:eee:ecolec:v:68:y:2009:i:5:p:1408-1416

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Web page: http://www.elsevier.com/locate/ecolecon

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Keywords: CAP mid-term review Cross-compliance MP (Mathematical Programming) model Agro-ecological indicators Arable farms;

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References

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  1. Petr Havlík & Patrick Veysset & Jean-Marie Boisson & Michel Lherm & Florence Jacquet, 2005. "Joint production under uncertainty and multifunctionality of agriculture: policy considerations and applied analysis," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 32(4), pages 489-515, December.
  2. Matthews, K.B. & Wright, I.A. & Buchan, K. & Davies, D.A. & Schwarz, G., 2006. "Assessing the options for upland livestock systems under CAP reform: Developing and applying a livestock systems model within whole-farm systems analysis," Agricultural Systems, Elsevier, vol. 90(1-3), pages 32-61, October.
  3. Aude Ridier & Florence Jacquet, 2002. "Decoupling Direct Payments and the Dynamics of Decisions under Price Risk in Cattle Farms," Journal of Agricultural Economics, Wiley Blackwell, vol. 53(3), pages 549-565.
  4. Alexandre Gohin, 2006. "Assessing CAP Reform: Sensitivity of Modelling Decoupled Policies," Journal of Agricultural Economics, Wiley Blackwell, vol. 57(3), pages 415-440.
  5. de Koeijer, T. J. & Renkema, J. A. & van Mensvoort, J. J. M., 1995. "Environmental-economic analysis of mixed crop-livestock farming," Agricultural Systems, Elsevier, vol. 48(4), pages 515-530.
  6. Bockstaller, C. & Girardin, P., 2003. "How to validate environmental indicators," Agricultural Systems, Elsevier, vol. 76(2), pages 639-653, May.
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Citations

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Cited by:
  1. Mosnier, C. & Agabriel, J. & Lherm, M. & Reynaud, A., 2009. "A dynamic bio-economic model to simulate optimal adjustments of suckler cow farm management to production and market shocks in France," Agricultural Systems, Elsevier, vol. 102(1-3), pages 77-88, October.
  2. Baptiste Lelyon & Vincent Chatellier & Karine Daniel, 2011. "Decoupling and prices: determinant of dairy farmers’ choices?," Working Papers 47123, Institut National de la Recherche Agronomique, France.
  3. Baptiste Lelyon & Vincent Chatellier & Karine Daniel, 2011. "Decoupling and prices: determinant of dairy farmers’ choices?," Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement, INRA Department of Economics, vol. 92(1), pages 47-68.
  4. Ricome, Aymeric & Chaib, Karim & Ridier, Aude & Kephaliacos, Charilaos & Carpy-Goulard, Francoise, 2012. "The role of cash crop marketing contracts in the adoption of low-input practices in the presence of risk and income supports," 126th Seminar, June 27-29, 2012, Capri, Italy 126222, European Association of Agricultural Economists.
  5. Jaraite, Jurate & Kažukauskas, Andrius, 2011. "The effect of mandatory agro-environmental policy on farm environmental performance," CERE Working Papers 2011:13, CERE - the Center for Environmental and Resource Economics.
  6. Aude Ridier & Charilaos Kephaliacos & Francoise Carpy-Goulard, 2011. "Private transaction costs and environmental cross compliance in a crop region of Southwestern France," International Journal of Agricultural Resources, Governance and Ecology, Inderscience Enterprises Ltd, vol. 9(1/2), pages 68-79.
  7. Sauer, Johannes & Walsh, John & Zilberman, David, 2012. "Producer Behaviour and Agri-Environmental Policies: A Directional Distance based Matching Approach," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124877, Agricultural and Applied Economics Association.
  8. Jacquet, Florence & Butault, Jean-Pierre & Guichard, Laurence, 2010. "An economic analysis of the possibility of reducing pesticides in French field crops," 120th Seminar, September 2-4, 2010, Chania, Crete 109382, European Association of Agricultural Economists.
  9. Petsakos, Athanasios & Jayet, Pierre-Alain, 2010. "Evaluating the efficiency of a N-input tax under different policy scenarios at different scales," 120th Seminar, September 2-4, 2010, Chania, Crete 109397, European Association of Agricultural Economists.
  10. Homolka, Jaroslav & Svecova, Michaela, 2012. "Analysis of financial support influences on management of agricultural enterprises," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 4(1), March.
  11. Sauer, Johannes & Walsh, John & Zilberman, David, 2013. "Agri-Environmental Policy Effects at Producer Level - Identification and Measurement," 53rd Annual Conference, Berlin, Germany, September 25-27, 2013 156099, German Association of Agricultural Economists (GEWISOLA).
  12. Sauer, Johannes & Walsh, John & Zilberman, David, 2012. "Behavioural Change through Agri-Environmental Policies ? – A Distance Function based Matching Approach," 86th Annual Conference, April 16-18, 2012, Warwick University, Coventry, UK 134783, Agricultural Economics Society.

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