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

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.