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The role of risk aversion and labor constraints in the adoption of low input practices supported by the CAP green payments in cash crop farms

Author

Listed:
  • Aude Ridier

    (AGROCAMPUS OUEST, UMR1302, F-35000 RENNES, France)

  • Mohamed Ben El Ghali
  • G. Nguyen
  • Charilaos Kephaliacos

Abstract

Since the late 1980s, many alternative practices have been proposed to European farmers to reduce pesticide and input use in general. These practices have been promoted by agro-environmental contracts signed between individual farmers and the European Union and by which farmers engage themselves in changing their practices. The adoption rate of these measures has remained very low in many European regions particularly in Southwestern France. This article aims at stressing the role played by risk attitude and labor constraint in farmers’ adoption decision. After presenting a static theoretical model which assesses the impact of labor constraints and risk attitude on the level of adoption of low input practices supported by agro-environmental contracts, the article proposes a numerical application based on a mathematical programming risk-model implemented on two typical crop farms in South-western France. Three kinds of contracts (no tillage, long rotation, lower pest treatments) are tested, two of them (long rotation and lower pest treatments) aiming at directly reducing input use. The results show that, despite the overall positive impact of alternative practices under contract on environment and farmers’ income, increased yield variability under positive risk aversion and larger labor requirements are actual barriers to adoption.

Suggested Citation

  • Aude Ridier & Mohamed Ben El Ghali & G. Nguyen & Charilaos Kephaliacos, 2013. "The role of risk aversion and labor constraints in the adoption of low input practices supported by the CAP green payments in cash crop farms," Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement, INRA Department of Economics, vol. 94(2), pages 195-219.
  • Handle: RePEc:rae:jourae:v:94:y:2013:i:2:p:195-219
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    References listed on IDEAS

    as
    1. Sami Myyrä & Elise Ketoja & Markku Yli-Halla & Kyöisti Pietola, 2005. "Land Improvements under Land Tenure Insecurity: The Case of pH and Phosphate in Finland," Land Economics, University of Wisconsin Press, vol. 81(4).
    2. Jussi Lankoski & Markku Ollikainen & Pekka Uusitalo, 2006. "No-till technology: benefits to farmers and the environment? Theoretical analysis and application to Finnish agriculture," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 33(2), pages 193-221, June.
    3. Ing-Marie Gren, 2001. "International Versus National Actions Against Nitrogen Pollution of the Baltic Sea," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 20(1), pages 41-59, September.
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    More about this item

    Keywords

    low input practices; risk; adoption; labor productivity; agri environmental incentives;

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy
    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics

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