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Evaluation of Agro-Environmental Policy through a Calibrated Simulation Farm Model

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  • Hansen, Kristiana
  • Frahan, Bruno Henry de
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    Abstract

    This paper evaluates the production and income effects from the adoption of one popular agro-environmental measure, which concerns buffer strips along field edges, on a representative sample of crop farms in Belgium taken from the Farm Accountancy Data Network database. We represent the economic behaviour of each crop farm with a profit-maximisation programming model that embeds an estimated ex-ante flexible cost function. We calibrate the simulation model using the Positive Mathematical Programming approach. Accounting for farm and regional heterogeneity, simulation results show how crop farms may respond differently to incentives for the agroenvironmental measure. Results demonstrate that economic incentives can be an effective mechanism for encouraging uptake of agro-environmental measures and that impacts of agro-environmental measures can vary by farm and region, depending on agronomic conditions and the environmental potential for agro-environmental measure activity.

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    Bibliographic Info

    Paper provided by European Association of Agricultural Economists in its series 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland with number 114577.

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    Date of creation: 2011
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    Handle: RePEc:ags:eaae11:114577

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    Keywords: Agricultural and Food Policy; Environmental Economics and Policy;

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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. Pierre Dupraz & Dominique Vermersch & Lionel Delvaux & Bruno Henry de Frahan, 1999. "Adoption d'une MAE et consentement à recevoir des agriculteurs en région wallone," Économie rurale, Programme National Persée, vol. 249(1), pages 71-81.
    3. Moschini, GianCarlo, 2001. "Production Risk and the Estimation of Ex Ante Cost Functions," Staff General Research Papers 1922, Iowa State University, Department of Economics.
    4. Bob Crabtree & Neil Chalmers & Nicola-Jo Barron, 1998. "Information for Policy Design: Modelling Participation in a Farm Woodland Incentive Scheme," Journal of Agricultural Economics, Wiley Blackwell, vol. 49(3), pages 306-320.
    5. Bertoni, Danilo & Cavicchioli, Daniele & Pretolani, Roberto & Olper, Alessandro, 2008. "Agri-Environmental Measures Adoption: New Evidence From Lombardy Region," 109th Seminar, November 20-21, 2008, Viterbo, Italy 44848, European Association of Agricultural Economists.
    6. Dupraz, Pierre & Vanslembrouck, Isabel & Bonnieux, Francois & Van Huylenbroeck, Guido, 2002. "Farmers' Participation in European Agri-Environmental Policies," 2002 International Congress, August 28-31, 2002, Zaragoza, Spain 24799, European Association of Agricultural Economists.
    7. 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.
    8. Pope, Rulon D. & Just, Richard E., 1996. "Empirical implementation of ex ante cost functions," Journal of Econometrics, Elsevier, vol. 72(1-2), pages 231-249.
    9. Helming, John F.M. & Schrijver, R.A.M., 2008. "Effects of agri-environmental measures and changes in EU single farm payments on Dutch agriculture," 107th Seminar, January 30-February 1, 2008, Sevilla, Spain 6602, European Association of Agricultural Economists.
    10. Barreiro-Hurle, Jesus & Espinosa-Goded, Maria & Dupraz, Pierre, 2008. "Does Intensity Of Change Matter? Factors Affecting Adoption In Two Agri-Environmental Schemes," 107th Seminar, January 30-February 1, 2008, Sevilla, Spain 6458, European Association of Agricultural Economists.
    11. Bruno Henry de Frahan & Alexandre Baudry & Rembert De Blander & Philippe Polomé & Richard Howitt, 2011. "Dairy farms without quotas in Belgium: estimation and simulation with a flexible cost function," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 38(4), pages 469-495, October.
    12. Defrancesco, Edi & Gatto, Paola & Runge, C. Ford & Trestini, Samuele, 2006. "Factors Affecting Farmers' Participation in Agri-Environmental Measures: Evidence from a Case Study," Conference Papers 6688, University of Minnesota, Center for International Food and Agricultural Policy.
    13. Hansen, Kristiana & Baudry, Alexandre & De Blander, Rembert & Frahan, Bruno Henry de & Polome, Philippe, 2009. "Estimating an Ex Ante Cost Function for Belgian Arable Crop Farms," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49477, Agricultural and Applied Economics Association.
    14. Judez, Lucinio & de Andres, Rosario & Ibanez, M. & Urzainqui, Elvira, 2008. "A Method For Including In Pmp Models Activities Non-Existent In The Baseline Situation," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 44243, European Association of Agricultural Economists.
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