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Economic and environmental impact of the CAP mid-term review on arable crop farming in South-western France

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  • Mosnier, Claire
  • Ridier, Aude
  • Kphaliacos, Charilaos
  • Carpy-Goulard, Françoise

Abstract

The issue addressed in this paper is whether implementation of the CAP MTR, (involving decoupled payments reduced by "modulations" and subject to cross-compliance measures) can be effective in improving the environmental impact of arable farming. The focus is on two French cross-compliance measures (compulsory buffer strips along rivers and crop diversity). A farm-level bio-economic model incorporating yield uncertainty is built and adjusted to represent two typical arable farms in the Southwest of France. The model also combines agro-environmental indicators. The results indicate that a simple decoupling of direct payments, without cross-compliance measures, has no impact on allocations between different crops. If cross-compliance measures are imposed, a small reduction in the cultivated area of irrigated crops is observed. The penalty levied (1% of the total subsidy paid) when farmers do not comply with the "buffer strips" requirement is sufficient for both farm-types. Decoupling and modulation result in a fall in the total gross margin of around 3%, principally because of the 5% modulation rate, while the "buffer strips" requirement leads to a further decrease of around 1%. Moreover, this requirement improves the environmental indicators at the farm level.

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  • 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.
    • Handle: RePEc:eee:ecolec:v:68:y:2009:i:5:p:1408-1416
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    13. Mosnier, Claire & Duclos, Anne & Agabriel, Jacques & Gac, Armelle, 2017. "Orfee: A bio-economic model to simulate integrated and intensive management of mixed crop-livestock farms and their greenhouse gas emissions," Agricultural Systems, Elsevier, vol. 157(C), pages 202-215.
    14. Sauer, Johannes & Walsh, John & Zilberman, David, 2012. "Behavioural Change through Agri-Environmental Policies ? – A Distance Function based Matching Approach," 86th Annual Conference, April 16-18, 2012, Warwick University, Coventry, UK 134783, Agricultural Economics Society.
    15. Aude Ridier & Charilaos Kephaliacos & Francoise Carpy-Goulard, 2011. "Private transaction costs and environmental cross compliance in a crop region of Southwestern France," International Journal of Agricultural Resources, Governance and Ecology, Inderscience Enterprises Ltd, vol. 9(1/2), pages 68-79.
    16. Homolka, Jaroslav & Svecova, Michaela, 2012. "Analysis of financial support influences on management of agricultural enterprises," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 4(1), pages 1-8, March.
    17. Schönhart, Martin & Schmid, Erwin & Schneider, Uwe A., 2009. "CropRota – A Model to Generate Optimal Crop Rotations from Observed Land Use," Discussion Papers DP-45-2009, University of Natural Resources and Life Sciences, Vienna, Department of Economics and Social Sciences, Institute for Sustainable Economic Development.
    18. Mosnier, C. & Agabriel, J. & Lherm, M. & Reynaud, A., 2009. "A dynamic bio-economic model to simulate optimal adjustments of suckler cow farm management to production and market shocks in France," Agricultural Systems, Elsevier, vol. 102(1-3), pages 77-88, October.
    19. Sauer, Johannes & Walsh, John & Zilberman, David, 2012. "Producer Behaviour and Agri-Environmental Policies: A Directional Distance based Matching Approach," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124877, Agricultural and Applied Economics Association.

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