Potential Contribution of Payments for Ecological Goods and Services to Farm Income

Agri-environmental payments are part of a re-instrumentation of farm support in some developed countries. In general, they are meant to contribute to the cost of meeting regulations, compensate for income lost by adopting certain practices, and reward farmers for providing environmental services. In this context, agri-environmental payments are seen as a vehicle which could potentially contribute to meet the double objectives of providing environmental benefits to society while supporting farm income. Such agri-environmental payments are gaining importance in the policy portfolio of certain countries in response to higher social expectations with respect to the environmental performance of the agricultural sector as well as in response to international agreements constraining the use of trade-distorting support measures. The present study sheds some light on limited international experience by assessing the contribution that payments for ecological goods and services make to farm income in Switzerland, France and the Walloon region of Belgium. Results show that the contribution from agri-environmental payments to farm income differs from country to country, is modest and commensurate with the additional costs incurred by agricultural producers.