CAP post-2013: alternative greening designs in Tuscany (Italy)

The provision of public goods is at the heart of agriculture’s multifunctionality. Since 1992s, the Common Agricultural Policy has addressed the environmental challenge by designing and implementing a set of environmental instruments, among which the most important are cross-compliance and agri-environmental schemes, respectively under Pillar I and Pillar II. The CAP has faced a reform where one of the main novelty beside to a new payment mechanism is the greening. This paper aims at assessing the ex-ante impact of alternative designs of the greening measure, within the framework of introduction of the new basic payment system. The design of the alternative scenarios encompasses the design of the optimal greening prescription: to increase the cost-effectiveness of the measure. The empirical analysis relies on Tuscany’s micro-data from the Italian agricultural Census 2010. We focus on the province of Grosseto, due to its high concentration of intensive farms. We apply a mathematical programming model at the farm level, which allows simulating the behaviour of farmers facing alternative greening designs under the new payment system. Data about farmers’ cost are derived from the Farm Accountancy Data Network. We assess the cost-effectiveness of alternative greening designs, by upscaling farm-level model’s results about the crop diversification index and the intensity of management.