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Are Production Technologies Associated To Agri-Environmental Programs More Eco-Efficient? A Case Study For Rain-Fed Agriculture

  • Mercedes Beltrán-Esteve

    (Departamento de Economía Aplicada II. Universidad de Valencia)

  • José A. Gómez-Limón

    (Departamento de Economía Agraria. Instituto Andaluz de Investigación y Formación Agraria y Pesquera. Córdoba)

  • Andrés J. Picazo-Tadeo

    (Departamento de Economía Aplicada II. Universidad de Valencia)

This paper analyses the impact of the Agri-environmental Extensification Scheme for the Protection of Flora and Fauna (F&F Scheme) on the eco-efficiency of a sample of dryland farms in the Spanish region of Castile and Leon. We explore whether or not the production technology of the farms included in the F&F Scheme is more eco-efficient than the technology used by farms that are not included in the Scheme, employing Data Envelopment Analysis (DEA) and the program decomposition proposed by Charnes et al. (1981) to do so. The results obtained confirm the foregoing hypothesis, providing evidence that environmental pressures could be reduced if all farms adopted the F&F Scheme technology. Furthermore, shadow prices are used to assess the monetary value of the potential reduction in environmental pressures that farms could achieve by adopting the F&F Scheme. The results show that the average opportunity cost of the decrease in environmental pressures (€55.65/ha) is similar to the compensation received by farms included in the F&F Scheme. Nevertheless, bearing in mind the great diversity of farms, we recommend agricultural policymakers to use an auction system to award such environmental contracts.

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File URL: ftp://147.156.210.157/RePEc/pdf/eec_1115.pdf
File Function: First version, 2011
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Paper provided by Department of Applied Economics II, Universidad de Valencia in its series Working Papers with number 1115.

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Length: 32 pages
Date of creation: Jun 2011
Date of revision:
Handle: RePEc:eec:wpaper:1115
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  1. Christopher O’Donnell & D. Rao & George Battese, 2008. "Metafrontier frameworks for the study of firm-level efficiencies and technology ratios," Empirical Economics, Springer, vol. 34(2), pages 231-255, March.
  2. Andrés J. Picazo-Tadeo & José A. Gómez-Limón & Ernest Reig-Martínez, 2010. "Assessing farming eco-efficiency: A Data Envelopment Analysis approach," Working Papers 1004, Department of Applied Economics II, Universidad de Valencia.
  3. José A. Gómez-Limón & Andrés J. Picazo-Tadeo & Ernest Reig-Martínez, 2011. "Eco-efficiency Assessment of Olive Farms in Andalusia," Working Papers 1105, Department of Applied Economics II, Universidad de Valencia.
  4. 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.
  5. Fare, Rolf & Grosskopf, Shawna & Weber, William L., 2006. "Shadow prices and pollution costs in U.S. agriculture," Ecological Economics, Elsevier, vol. 56(1), pages 89-103, January.
  6. Reig-Martinez, Ernest & Picazo-Tadeo, Andres & Hernandez-Sancho, Francesc, 2001. "The calculation of shadow prices for industrial wastes using distance functions: An analysis for Spanish ceramic pavements firms," International Journal of Production Economics, Elsevier, vol. 69(3), pages 277-285, February.
  7. Maria Espinosa-Goded & Jes�s Barreiro-Hurlé & Eric Ruto, 2010. "What Do Farmers Want From Agri-Environmental Scheme Design? A Choice Experiment Approach," Journal of Agricultural Economics, Wiley Blackwell, vol. 61(2), pages 259-273.
  8. Fare, Rolf & Grosskopf, Shawna & Noh, Dong-Woon & Weber, William, 2005. "Characteristics of a polluting technology: theory and practice," Journal of Econometrics, Elsevier, vol. 126(2), pages 469-492, June.
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