Testing the Intensification Hypothesis for EU Agriculture.

This paper tests the so called "intensification hypothesis" for EU agriculture based on a panel data over the period 1961-1994. The empirical results indicate the acceptance of this hypothesis for all countries, except Portugal. Nevertheless, on statistical grounds, the intensification hypothesis holds only marginally for Austria, Belgium-Luxembourg, Denmark and Germany. Thus, increased price support in EU agriculture, is likely to lead to output increases, which in turn will result in a higher fertiliser/hectare ratio, i.e., in greater intensification of production and possibly in even more negative environmental impacts.