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Agri-environmental schemes in the European Union: the role of ex ante costs

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  • Peerlings, Jack H.M.
  • Polman, Nico B.P.
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    Abstract

    The purpose of this paper is to analyse land allocation between competing agri-environmental contracts taking into account institutional issues and farm household and farm characteristics. We consider a Biodiversity Protection Contract, Landscape Management Contract and a Restriction on Intensive Practises Contract. The paper shows that it is important to study the choice for an agrienvironmental contract in combination with the choice for other agri-environmental contracts. The reasons being that a unit of land can only be allocated to one contract (although a farm can select more than one contract) and perceived relative marginal costs of contracts can change if institutional settings and farm household and farm characteristics alter. The model uses a two stage method. In the first step the probability of contract choice is determined. In the second stage these probabilities are linked to ex ante costs (including transaction costs) and optimal contract choice is determined.

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    File URL: http://purl.umn.edu/6698
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    Bibliographic Info

    Paper provided by European Association of Agricultural Economists in its series 107th Seminar, January 30-February 1, 2008, Sevilla, Spain with number 6698.

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    Date of creation: 2008
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    Handle: RePEc:ags:eaa107:6698

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    Related research

    Keywords: Agri-environmental contracts; transaction costs; contract choice; Agricultural and Food Policy; Environmental Economics and Policy; Land Economics/Use;

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    1. Gerard Wynn & Bob Crabtree & Jacqueline Potts, 2001. "Modelling Farmer Entry into the Environmentally Sensitive Area Schemes in Scotland," Journal of Agricultural Economics, Wiley Blackwell, vol. 52(1), pages 65-82.
    2. Jack Peerlings, 2004. "Wildlife and landscape services production in Dutch dairy farming; jointness and transaction costs," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 31(4), pages 427-449, December.
    3. Isabel Vanslembrouck & Guido Huylenbroeck & Wim Verbeke, 2002. "Determinants of the Willingness of Belgian Farmers to Participate in Agri-environmental Measures," Journal of Agricultural Economics, Wiley Blackwell, vol. 53(3), pages 489-511.
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