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Optimale Vertragsdifferenzierung in der Agrarumweltpolitik

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  • Glebe, Thilo W.

Abstract

This article deals with the optimal differentiation of agri-environmental contracts based on a self-selection mechanism. The paper demonstrates that both economic efficiency and effectiveness of public expenditures can be increased, if a menu of combinations of farming practices and payments are offered. However, there is a trade-off between efficiency and effectiveness, since the optimal programme minimising government expenses does not simultaneously minimise farmers’ opportunity costs. A numerical example of differentiated agri-environmental contracts, aiming for the reduction of nitrogen fertiliser in wheat production, illustrates that efficiency and effectiveness gains can be substantial. Furthermore, it is shown that economic rents for agricultural producers do not necessarily shrink as a result of contract differentiation, if the latter aims for the minimisation of public expenditures.

Suggested Citation

  • Glebe, Thilo W., 2006. "Optimale Vertragsdifferenzierung in der Agrarumweltpolitik," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 55(04), pages 1-9.
    • Handle: RePEc:ags:gjagec:97185
    DOI: 10.22004/ag.econ.97185
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    References listed on IDEAS

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    1. Andrew Moxey & Ben White & Adam Ozanne, 1999. "Efficient Contract Design for Agri‐Environment Policy," Journal of Agricultural Economics, Wiley Blackwell, vol. 50(2), pages 187-202, May.
    2. 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.
    3. Baumol,William J. & Oates,Wallace E., 1988. "The Theory of Environmental Policy," Cambridge Books, Cambridge University Press, number 9780521322249.
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