Modelling of Agricultural Behavior under the CAP Regime: Assessment of Environmental Impacts and Policy Effectiveness
AbstractThe structure of farming activity under the provisions of the generalized regime of the Common Agricultural Policy involving both the first and second pillar elements is modelled. Independently of whether regulated agents exhibit unbounded or bounded rationality, the impact of the different type of CAP measures, as prescribed by Agenda 2000, in the decision making - and thus on the environmental performance of a homogeneous population of farmers - are discussed. The problem of a representative farmer is used for this purpose. After assessing the environmental effectiveness of the various CAP regimes, the mechanism that provides the type of CAP instruments that safeguard the collective attainment of a social environmental target, along with the type of interdependence characterizing them, is defined under the analytical framework of unboundedly and boundedly rational agents respectively. The problem of the optimal regulation of an unboundedly rational population of farmers is discussed in both a static and a dynamic context. The long-run viability of the Agenda 2000 CAP reform is also examined under the assumption of bounded rationality by employing the evolutionary framework of replicator dynamics.
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Bibliographic InfoPaper provided by University of Crete, Department of Economics in its series Working Papers with number 0818.
Length: 26 pages
Date of creation: 10 Dec 2007
Date of revision: 01 Jul 2008
Environmental impacts; coupling; decoupling; production subsidy; direct payment; cross-compliance principle; rural development subsidy.;
Find related papers by JEL classification:
- Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy
- Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
This paper has been announced in the following NEP Reports:
- NEP-AGR-2008-07-20 (Agricultural Economics)
- NEP-ALL-2008-07-20 (All new papers)
- NEP-ENV-2008-07-20 (Environmental Economics)
- NEP-REG-2008-07-20 (Regulation)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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