IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

Evaluating greening farm policies: A structural model for assessing agri-environmental subsidies

  • Marita Laukkanen
  • Céline Nauges

One quarter of the agricultural area in the European Union is registered in agrienvironmental programs. Despite the prevalence of such programs and increasing demands for environmental quality in the European Union, ex-post assessments of program benefits are rare. This study uses a structural econometric model to evaluate the impacts of agri-environmental payments provided through the Finnish Agri-Environmental Program, whose primary goal is to reduce nutrient pollution from agricultural land. Drawing on a representative sample of individual grain farms, the research quantifies the effects of agri-environmental payments on farmers? decisions on the use of agri-chemical inputs and on the allocation of land to grain production and set-aside (fallow) over the period 1996?2005. The effects of program payments are ascertained based on exogenous variation in payment rates across regions and over time. We find that the agri-environmental payments have reduced fertilizer inputs but that this impact has been modest. In terms of land allocation, the impact has been counterproductive in that the payments have slightly increased the grain area and reduced set-aside. To quantify the impact of agri-environmental payments on nutrient loading ? the environmental outcome of interest ? we then combine the predicted land allocation and fertilizer use with environmental production functions. Overall, we estimate that the payments have reduced the damage costs associated with nutrient pollution from grain farming by 11 to 12 percent.

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.vatt.fi/file/vatt_publication_pdf/wp40.pdf
Download Restriction: no

File URL: http://www.vatt.fi/publications/latestPublications/publication/Publication_1345_id/927
Download Restriction: no

Paper provided by Government Institute for Economic Research Finland (VATT) in its series Working Papers with number 40.

as
in new window

Length:
Date of creation: 04 Nov 2012
Date of revision:
Handle: RePEc:fer:wpaper:40
Contact details of provider: Postal: Arkadiankatu 7, P.O. Box 1279, FI-00101 Helsinki
Phone: +358 295 519 400
Fax: +358 295 519 599
Web page: http://www.vatt.fi/
Email:


More information through EDIRC

Order Information: Email:


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. Kosenius, Anna-Kaisa, 2010. "Heterogeneous preferences for water quality attributes: The Case of eutrophication in the Gulf of Finland, the Baltic Sea," Ecological Economics, Elsevier, vol. 69(3), pages 528-538, January.
  2. Koikkalainen, Kauko & Laukkanen, Marita & Helin, Janne, 2006. "Abatement costs for agricultural nitrogen and phosphorus loads: a case study of South-Western Finland," Discussion Papers 11867, MTT Agrifood Research Finland.
  3. Baylis, Katherine R. & Rausser, Gordon C., 2004. "Agri-Environmental Programs In The United States And The European Union," Working Papers 15848, University of British Columbia, Food and Resource Economics.
  4. Turtola, E. & Paajanen, A., 1995. "Influence of improved subsurface drainage on phosphorus losses and nitrogen leaching from a heavy clay soil," Agricultural Water Management, Elsevier, vol. 28(4), pages 295-310, December.
  5. Aviv Nevo & Michael D. Whinston, 2010. "Taking the Dogma out of Econometrics: Structural Modeling and Credible Inference," Journal of Economic Perspectives, American Economic Association, vol. 24(2), pages 69-82, Spring.
  6. Keane, Michael P., 2010. "Structural vs. atheoretic approaches to econometrics," Journal of Econometrics, Elsevier, vol. 156(1), pages 3-20, May.
  7. J.J. Heckman & E.E. Leamer (ed.), 2007. "Handbook of Econometrics," Handbook of Econometrics, Elsevier, edition 1, volume 6, number 6a, January.
  8. J.J. Heckman & E.E. Leamer (ed.), 2007. "Handbook of Econometrics," Handbook of Econometrics, Elsevier, edition 1, volume 6, number 6b, January.
  9. Lubowski, Ruben & Plantinga, Andrew & Stavins, Robert, 2007. "What Drives Land Use Change in the United States? A National Analysis of Landowner Decisions," Working Paper Series rwp07-059, Harvard University, John F. Kennedy School of Government.
  10. Phoebe Koundouri & Marita Laukkanen & Sami Myyrä & Celine Nauges, 2009. "The effects of EU agricultural policy changes on farmers' risk attitudes," Working Papers 30225, Institut National de la Recherche Agronomique, France.
  11. Nick Hanley & David Oglethorpe, 1999. "Emerging Policies on Externalities from Agriculture: An Analysis for the European Union," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(5), pages 1222-1227.
  12. Marita Laukkanen & Céline Nauges, 2011. "Environmental and Production Cost Impacts of No-till in Finland: Estimates from Observed Behavior," Land Economics, University of Wisconsin Press, vol. 87(3), pages 508-527.
  13. JunJie Wu & Richard M. Adams & Catherine L. Kling & Katsuya Tanaka, 2004. "From Microlevel Decisions to Landscape Changes: An Assessment of Agricultural Conservation Policies," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(1), pages 26-41.
  14. Nigel Key & Ruben N. Lubowski & Michael J. Roberts, 2005. "Farm-Level Production Effects from Participation in Government Commodity Programs: Did the 1996 Federal Agricultural Improvement and Reform Act Make a Difference?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(5), pages 1211-1219.
  15. Chabé-Ferret, Sylvain & Subervie, Julie, 2012. "How Much Green for the Buck? Estimating Additional and Windfall Effects of French Agro-Environmental Schemes by DID-Matching," TSE Working Papers 12-357, Toulouse School of Economics (TSE).
  16. Andrea Pufahl & Christoph R. Weiss, 2009. "Evaluating the effects of farm programmes: results from propensity score matching," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 36(1), pages 79-101, March.
  17. Anne Lacroix & Alban Thomas, 2011. "Estimating the Environmental Impact of Land and Production Decisions with Multivariate Selection Rules and Panel Data," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 93(3), pages 780-798.
  18. Smith, Vincent H. & Goodwin, Barry K., 2003. "An Ex Post Evaluation of the Conservation Reserve, Federal Crop Insurance, and Other Government Programs: Program Participation and Soil Erosion," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 28(02), August.
  19. Carlo Fezzi & Ian J. Bateman, 2011. "Structural Agricultural Land Use Modeling for Spatial Agro-Environmental Policy Analysis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 93(4), pages 1168-1188.
  20. James J. Heckman, 2010. "Building Bridges Between Structural and Program Evaluation Approaches to Evaluating Policy," NBER Working Papers 16110, National Bureau of Economic Research, Inc.
  21. 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.
  22. J. Scott Shonkwiler & Steven T. Yen, 1999. "Two-Step Estimation of a Censored System of Equations," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(4), pages 972-982.
  23. Markowska, Agnieszka & Zylicz, Tomasz, 1999. "Costing an international public good: the case of the Baltic Sea," Ecological Economics, Elsevier, vol. 30(2), pages 301-316, August.
  24. Carlos Arnade & David Kelch, 2007. "Estimation of Area Elasticities from a Standard Profit Function," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 89(3), pages 727-737.
Full references (including those not matched with items on IDEAS)

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

When requesting a correction, please mention this item's handle: RePEc:fer:wpaper:40. 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: (Anita Niskanen)

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.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.