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Crop biodiversity repercussions of subsidized organic farming in Greece

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  • Nastis, Stefanos A.
  • Michailidis, Anastasios
  • Mattas, Konstadinos

Abstract

This paper analyzes the impact of CAP financial assistance on crop biodiversity under uncertainty. A stochastic production function is employed and estimated to assess whether risk-averse farmers hedge risk by diversifying their portfolio of crops, thus increasing crop biodiversity. The model is applied to farm-level data of organic crop farms in Greece. Organic farming financial assistance poses a double-edged sword: even though it is considered agrobiodiversity enhancing as a cultivation method, subsidizing it can become agrobiodiversity reducing, since farmers may select to cultivate only the subsidized crops. The study shows that risk aversion leads to crop biodiversity conservation. However, providing CAP financial assistance on certain crops appears to decrease the relationship between revenue risk management and crop biodiversity, indirectly resulting in crop biodiversity loss.

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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 114628.

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Date of creation: 02 Sep 2011
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Handle: RePEc:ags:eaae11:114628

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Keywords: crop biodiversity; agroecosystem; risk management; agricultural assistance; Crop Production/Industries; Farm Management; Resource /Energy Economics and Policy; Q12; Q18; D80; Q24; Q57;

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Cited by:
  1. Elisa Gatto & Alba Marino & Guido Signorino, 2013. "Biodiversity and risk management in agriculture:what do we learn from CAP reforms? A farm-level analysis," ERSA conference papers ersa13p805, European Regional Science Association.

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