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Agri-environmental contracting of Dutch dairy farms: the role of manure policies and the occurrence of lock-in

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  • Jack Peerlings
  • Nico Polman

Abstract

The paper examines the possibility of lock-in on the area contracted under an agri-environmental contract in Dutch dairy farming, using a mathematical programming model, and the interaction of these contracts with Dutch national manure policy. Stricter manure policies increase contract participation, since more restrictive N application standards lower the opportunity cost of contracting. If contract payments are halved in a later period, 95 per cent of the contracting farms in the model would like to alter their contracting decision but they do not because of the cost of grassland renewal (switching cost). These farms are locked-in. The model incorporates time, transaction cost and technical and institutional constraints. Oxford University Press and Foundation for the European Review of Agricultural Economics 2008; all rights reserved. For permissions, please email journals.permissions@oxfordjournals.org, Oxford University Press.

Suggested Citation

  • Jack Peerlings & Nico Polman, 2008. "Agri-environmental contracting of Dutch dairy farms: the role of manure policies and the occurrence of lock-in," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 35(2), pages 167-191, June.
    • Handle: RePEc:oup:erevae:v:35:y:2008:i:2:p:167-191
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    File URL: http://hdl.handle.net/10.1093/erae/jbn022
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    Cited by:

    1. Jacquet, Florence & Butault, Jean-Pierre & Guichard, Laurence, 2011. "An economic analysis of the possibility of reducing pesticides in French field crops," Ecological Economics, Elsevier, vol. 70(9), pages 1638-1648, July.
    2. Bertoni, Danilo & Curzi, Daniele & Aletti, Giacomo & Olper, Alessandro, 2020. "Estimating the effects of agri-environmental measures using difference-in-difference coarsened exact matching," Food Policy, Elsevier, vol. 90(C).
    3. Julia Jouan & Julia Heinrichs & Wolfgang Britz & Christoph Pahmeyer, 2019. "Integrated assessment of legume production challenged by European policy interaction: a case-study approach from French and German dairy farms," Working Papers hal-02501428, HAL.
    4. Zimmermann, Andrea & Britz, Wolfgang, 2014. "European Farms’ Participation in Agri-environmental Measures," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 183073, European Association of Agricultural Economists.
    5. Thomas Kopp, 2022. "When switching costs cause market power: Rubber processing in Indonesia," Agricultural Economics, International Association of Agricultural Economists, vol. 53(3), pages 481-495, May.
    6. Graversgaard, Morten & Jacobsen, Brian H. & Hoffmann, Carl Christian & Dalgaard, Tommy & Odgaard, Mette Vestergaard & Kjaergaard, Charlotte & Powell, Neil & Strand, John A. & Feuerbach, Peter & Tonder, 2021. "Policies for wetlands implementation in Denmark and Sweden – historical lessons and emerging issues," Land Use Policy, Elsevier, vol. 101(C).
    7. Zavalloni, Matteo & D’Alberto, Riccardo & Raggi, Meri & Viaggi, Davide, 2021. "Farmland abandonment, public goods and the CAP in a marginal area of Italy," Land Use Policy, Elsevier, vol. 107(C).
    8. 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.
    9. Shahab, Sina & Clinch, J. Peter & O’Neill, Eoin, 2018. "Accounting for transaction costs in planning policy evaluation," Land Use Policy, Elsevier, vol. 70(C), pages 263-272.
    10. Reidsma, Pytrik & Janssen, Sander & Jansen, Jacques & van Ittersum, Martin K., 2018. "On the development and use of farm models for policy impact assessment in the European Union – A review," Agricultural Systems, Elsevier, vol. 159(C), pages 111-125.
    11. Bamière, Laure & Havlík, Petr & Jacquet, Florence & Lherm, Michel & Millet, Guy & Bretagnolle, Vincent, 2011. "Farming system modelling for agri-environmental policy design: The case of a spatially non-aggregated allocation of conservation measures," Ecological Economics, Elsevier, vol. 70(5), pages 891-899, March.
    12. Mettepenningen, E. & Beckmann, V. & Eggers, J., 2011. "Public transaction costs of agri-environmental schemes and their determinants--Analysing stakeholders' involvement and perceptions," Ecological Economics, Elsevier, vol. 70(4), pages 641-650, February.

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