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The effect of mandatory agro-environmental policy on farm environmental performance

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Abstract

The EU farmers are subject to mandatory cross compliance measures requiring them to meet environmental conditions to be eligible for public support. These obligations reinforce incentives for the farmers to change their behaviour towards the environment. We apply quasi-experimental methods to measure the causal relationship between cross-compliance and farm environmental performance. We find that cross compliance reduced farm fertiliser and pesticide expenditure. This result also holds for farmers who participated in other voluntary agro-environmental schemes. However, the results do not support our expectations that farmers who relied on larger shares of public payments had a stronger motivation to improve their environmental performance.

Suggested Citation

  • Jaraite, Jurate & Kažukauskas, Andrius, 2011. "The effect of mandatory agro-environmental policy on farm environmental performance," CERE Working Papers 2011:13, CERE - the Center for Environmental and Resource Economics.
  • Handle: RePEc:hhs:slucer:2011_013
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    File URL: http://www-sekon.slu.se/~gbost/CERE_WP2011-13.pdf
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    1. Baylis, Kathy & Peplow, Stephen & Rausser, Gordon & Simon, Leo, 2008. "Agri-environmental policies in the EU and United States: A comparison," Ecological Economics, Elsevier, vol. 65(4), pages 753-764, May.
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    3. Mark Brady & Konrad Kellermann & Christoph Sahrbacher & Ladislav Jelinek, 2009. "Impacts of Decoupled Agricultural Support on Farm Structure, Biodiversity and Landscape Mosaic: Some EU Results," Journal of Agricultural Economics, Wiley Blackwell, vol. 60(3), pages 563-585.
    4. Osterburg, Bernhard & Nitsch, Heike & Kristensen, Lone, 2005. "Environmental Standards and Their Linkage to Support Instruments of the EU Common Agricultural Policy," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24521, European Association of Agricultural Economists.
    5. Webster, Paul & Williams, Nigel, 2002. "Environmental Cross Compliance - Panacea or Placebo?," 13th Congress, Wageningen, The Netherlands, July 7-12, 2002 7004, International Farm Management Association.
    6. Greenstone, Michael & Gayer, Ted, 2009. "Quasi-experimental and experimental approaches to environmental economics," Journal of Environmental Economics and Management, Elsevier, vol. 57(1), pages 21-44, January.
    7. Kazukauskas, Andrius & Newman, Carol F., 2010. "CAP reform and its impact on structural change and productivity growth: A cross country analysis," 114th Seminar, April 15-16, 2010, Berlin, Germany 61103, European Association of Agricultural Economists.
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    10. Kazukauskas, Andrius & Newman, Carol F. & Thorne, Fiona S., 2010. "Analysing the Effect of Decoupling on Agricultural Production: Evidence from Irish Dairy Farms using the Olley and Pakes Approach," Journal of International Agricultural Trade and Development, Journal of International Agricultural Trade and Development, vol. 59(3).
    11. Mosnier, Claire & Ridier, Aude & Kphaliacos, Charilaos & Carpy-Goulard, Françoise, 2009. "Economic and environmental impact of the CAP mid-term review on arable crop farming in South-western France," Ecological Economics, Elsevier, vol. 68(5), pages 1408-1416, March.
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    Keywords

    agriculture; Common Agriculture Policy; cross-compliance; environment; EU; farm;

    JEL classification:

    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets

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