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Towards a cost-benefit assessment of farm structural change in European mountain regions

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  • Huber, Robert

Abstract

Farm structural change increases the productivity and efficiency of farming. In the policy debate, however, there is still a strong attachment to a highly fragmented structure of family farms, especially in countries with high support for the agricultural sector. In these regions, the somewhat “romantic” attachment to small family farms in the policy debate may also be interpreted as a public preference for concomitant non-use values of agricultural production. As a consequence, a cost-benefit analysis including the economic gains from farm structural change as well as the non-use values of small-scale, traditional agriculture may give a new perspective on this policy debate. We here combine results from a discrete choice experiment in a Swiss mountain region with simulation results from an agent-based farm model in the same case study region. We compare the willingness to pay of local people for farm survival with the reduced average income that results from impeded structural change. Results imply that on average WTP is higher than the opportunity costs. However, the differentiation into farm types shows that productive full-time farmers would have to bear the highest opportunity costs that exceed the average WTP by far. We discuss this result with respect to the policy debate and further research.

Suggested Citation

  • Huber, Robert, 2016. "Towards a cost-benefit assessment of farm structural change in European mountain regions," 149th Seminar, October 27-28, 2016, Rennes, France 244785, European Association of Agricultural Economists.
    • Handle: RePEc:ags:eaa149:244785
    DOI: 10.22004/ag.econ.244785
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    References listed on IDEAS

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    1. Andrea Zimmermann & Thomas Heckelei, 2012. "Structural Change of European Dairy Farms – A Cross-Regional Analysis," Journal of Agricultural Economics, Wiley Blackwell, vol. 63(3), pages 576-603, September.
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    3. Chiara Mazzocchi & Guido Sali, 2016. "Sustainability and Competitiveness of Agriculture in Mountain Areas: A Willingness to Pay (WTP) Approach," Sustainability, MDPI, vol. 8(4), pages 1-13, April.
    4. José A. Gómez‐Limón & Esperanza Vera‐Toscano & Margarita Rico‐González, 2012. "Measuring Individual Preferences for Rural Multifunctionality: The Importance of Demographic and Residential Heterogeneity," Journal of Agricultural Economics, Wiley Blackwell, vol. 63(1), pages 1-24, February.
    5. Jerry Hausman, 2012. "Contingent Valuation: From Dubious to Hopeless," Journal of Economic Perspectives, American Economic Association, vol. 26(4), pages 43-56, Fall.
    6. Julia Maria Brändle & Gaby Langendijk & Simon Peter & Sibyl Hanna Brunner & Robert Huber, 2015. "Sensitivity Analysis of a Land-Use Change Model with and without Agents to Assess Land Abandonment and Long-Term Re-Forestation in a Swiss Mountain Region," Land, MDPI, vol. 4(2), pages 1-38, June.
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    Keywords

    Agricultural and Food Policy; Farm Management;

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