AgriFood-WP,
Lund University, AgriFood Economics Centre

Abstract: A topical policy goal is to design agri-environmental schemes that not only protect the environment but also foster agricultural production. This paper contribute with new knowledge towards this ambition, exploring the role of agri-environmental schemes for farm survival. Employing rich farmlevel data on Swedish farms during 2001-2014, we explore farm survival using discrete-time hazard models and finds a significant association between agri-environmental schemes and farm survival. More specifically, the results suggests that participants are more likely to survive than farms without an agri-environmental scheme commitment and more extensive commitments favors increased survival up to a point when the commitment becomes too large in relation to other commitments and resources of the farm. Robustness analysis across subsamples of farms supports the finding that agri-environmental schemes are correlated with survival also for different groups of farms. Together, these results suggests that the agri-environmental schemes are important for farmers, and not only as a means to enable environmental protection. Consequently, this study contributes to policy, underlining the importance to encompass consequences beyond environmental concerns when assessing the overall benefits of the agri-environmental schemes.

Keywords: agri-environmental schemes; farm survival; duration analysis; Sweden

JEL-codes: N50

38 pages, August 21, 2020

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