The impact of the Single Farm Payments on the Expenditure on Fertilizers and crop protection inputs: a comparative study of the Italian agriculture
AbstractThe Health Check (HC) of the European Common Agricultural Policy in 2003 sped up the process of policy reforms toward decoupled payments in order to urge agricultural production to respond to market signals. However, since decoupled payments could generate “coupled” effects on production, it remains questionable how single farm payment (SFP) alters agricultural intensification. Therefore, through a comparative statistical analysis applied on Italian FADN regional data, this paper aims at evaluating whether the HC reform had positive impacts on the aggregate expenditure on fertilizers and crop production inputs. From the results, it is observed that the expansion of profitable crops like vegetables, flowers and vineyards, along with the receipt of SFP increased the expenditure of fertilizers and crop protection inputs. Such findings suggest that the HC reform has been so far effective in terms of aligning agricultural production to markets’ signals, but with the unintended consequence of higher intensification. We deduce that farmers may allocate higher proportions of SFP to purchase fertilizers and crop protection inputs whenever the opportunity of higher profits is found in those cropping activities requiring a higher intensive use of production’ factors.
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Bibliographic InfoPaper provided by European Association of Agricultural Economists in its series 120th Seminar, September 2-4, 2010, Chania, Crete with number 109428.
Date of creation: 2010
Date of revision:
input use; agricultural intensification; CAP Mid Term Review; Single Farm Payments; cross-compliance.; Agricultural and Food Policy; Crop Production/Industries; Environmental Economics and Policy; Farm Management; Health Economics and Policy; Land Economics/Use; Production Economics;
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