Advanced Search
MyIDEAS: Login

Fixed costs involved in crop pattern changes and agri-environmental schemes

Contents:

Author Info

  • Maria Espinosa-Goded
  • Pierre Dupraz
  • Jesùs Barreiro-Hurlé

Abstract

Agri-environmental schemes are the main policy instrument currently available in the European Union to promote environmentally friendly farming practices. Nevertheless, the adoption rate of these measures is still limited. This paper develops a profit maximizer theoretical framework to explain the farmer’s sign-up decision and the area to put under an agri-environmental measure characterised by a change in the crop pattern. The application concerns an agri-environmental measure awarding the introduction of alfalfa in cereal farms in Natura 2000 designated areas of Aragon (Spain). The econometric specification accounts for both the upper censoring of the enrolled area, constrained by the available eligible area, and the self-selection of contractors according to the extra-profit of their enrolment. To test the absence of fixed costs of enrolment, a simple tobit with a lower and an upper bound, that corresponds to the non fixed costs situation, is compared to the censored model with selection. Estimated specifications based on the enrolled area do not provided normally distributed residues and are not suitable to carry out the likelihood ratio test. Estimated specifications based on the share of enrolled area in the eligible area provide normally distributed residues. The likelihood ratio test rejects the absence of fixed costs. Technical factors as well as social capital variables are taken into consideration as determinants of technical and transaction costs. Estimation results show that there is an adoption barrier derived from the know-how affecting the fixed compliance costs of introducing the new crop. In addition, there is an adoption barrier derived from transaction costs which are reduced in the presence of social networks. These results suggest that a non linear payment mechanism or auctions might be suitable to ensure a better coverage of Natura 2000 eligible areas by the contracts, with a limited increase in related public expenditures.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.rennes.inra.fr/smart/Media/Working-papers/WP09-15
Download Restriction: no

Bibliographic Info

Paper provided by INRA UMR SMART in its series Working Papers SMART - LERECO with number 09-15.

as in new window
Length:
Date of creation: 2009
Date of revision:
Handle: RePEc:rae:wpaper:200915

Contact details of provider:
Postal: 4, Allée Adolphe Bobierre, CS 61103, 35011 Rennes Cedex
Email:
Web page: http://www.rennes.inra.fr/smart_eng/Working-Papers-SMART-LERECO
More information through EDIRC

Related research

Keywords: agri-environmental scheme; land use; fixed costs; transaction costs; qualitative and limited dependent variable model;

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
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.:
as in new window
  1. Joseph Cooper & Giovanni Signorello, 2008. "Farmer Premiums for the Voluntary Adoption of Conservation Plans," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 51(1), pages 1-14.
  2. Thilo Glebe & Klaus Salhofer, 2007. "EU agri-environmental programs and the "restaurant table effect"," Agricultural Economics, International Association of Agricultural Economists, vol. 37(2-3), pages 211-218, 09.
  3. 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.
  4. 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.
  5. Uwe Latacz-Lohmann & Carel Van der Hamsvoort, 1997. "Auctioning Conservation Contracts: A Theoretical Analysis and an Application," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(2), pages 407-418.
Full references (including those not matched with items on IDEAS)

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:rae:wpaper:200915. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Anne Chauvel).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.