Economic and environmental impact of the CAP mid-term review on arable crop farming in South-western France
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.
Year of publication: |
2009
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Authors: | Mosnier, Claire ; Ridier, Aude ; Kphaliacos, Charilaos ; Carpy-Goulard, Françoise |
Published in: |
Ecological Economics. - Elsevier, ISSN 0921-8009. - Vol. 68.2009, 5, p. 1408-1416
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Publisher: |
Elsevier |
Keywords: | CAP mid-term review Cross-compliance MP (Mathematical Programming) model Agro-ecological indicators Arable farms |
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