Intervention in Agricultural Systems that Provide Positive Environmental Externalities: an Evaluation of Alternative Instruments

The Common Agricultural Policy (CAP) intervenes in most agricultural systems that provide positive environmental externalities using both direct payments and agrienvironmental schemes. In this context, the objective of this paper is to compare the efficiency of the current intervention system versus intervening using agri-environmental payments as a sole instrument. The cereal steppes agroecosystem of Tierra de Campos (Valladolid, Spain) has been selected to develop this comparison. A farm survey and a Positive Mathematical Programming Model have been combined to provide results of both alternative instruments. The farm survey was used to ask the farmers their payments demands to participate in the alternative instrument, supplying also qualitative information about how it is perceived by farmers. The payments demanded were simulated in the model to get environmental and economic indicators for both instruments. Instruments were evaluated using a cost-effectiveness approach were total public expenditure was conserved constant for both. The main conclusion of this research is that policy intervention effectiveness could be potentially increased using an agri-environmental scheme as the unique intervention instrument. Considering this finding, results transferability to other agricultural systems and policy consequences in the context of the CAP are finally discussed.