Scandinavian Working Papers in Economics

CERE Working Papers,
CERE - the Center for Environmental and Resource Economics

No 2011:13: The effect of mandatory agro-environmental policy on farm environmental performance

Jurate Jaraite () and Andrius Kažukauskas ()
Additional contact information
Jurate Jaraite: CERE, Postal: Centre for Environmental and Resource Economics, S-901 87 Umeå, Sweden
Andrius Kažukauskas: CERE, Postal: Centre for Environmental and Resource Economics, S-901 87 Umeå, Sweden

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.

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

JEL-codes: Q12

31 pages, September 9, 2011

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CERE_WP2011-13.pdf PDF-file 

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