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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

Listed author(s):
  • Aude Ridier

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

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

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.

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Article provided by INRA Department of Economics in its journal Review of Agricultural and Environmental Studies.

Volume (Year): 94 (2013)
Issue (Month): 2 ()
Pages: 195-219

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Handle: RePEc:rae:jourae:v:94:y:2013:i:2:p:195-219
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