Economic and environmental impact of the CAP mid-term review on arable crop farming in South-western France

Claire Mosnier, Aude Ridier, Charilaos Kphaliacos and Françoise Carpy-Goulard

Ecological Economics, 2009, vol. 68, issue 5, 1408-1416

Abstract: 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.

Keywords: CAP; mid-term; review; Cross-compliance; MP; (Mathematical; Programming); model; Agro-ecological; indicators; Arable; farms (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (26)

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Working Paper: Economic and environmental impact of the CAP mid-term review on arable crop farming in South-western France (2009)
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