Acceptable Reforms of Agri-Environmental Policies

Philippe Bontems, Gilles Rotillon and Nadine Turpin

No 19150, 2005 Annual meeting, July 24-27, Providence, RI from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

Abstract: We consider a model of regulation for nonpoint source water pollution through non linear taxation/subsidization of agricultural production. Farmers are heterogenous along two dimensions, their ability to transform inputs into final production and the available area they possess. Asymmetric information and participation of farmers to the regulation scheme put constraints on the optimal policy that we characterize. We show that a positive relationship between size of land and ability may exacerbate adverse selection effects. We then introduce acceptability constraints and show that the intervention under acceptability amounts to reallocate production towards inefficient farmers who benefit from the reform at the expense of efficient producers. Last, we calibrate the model using datas on a french watershed (Don watershed). Simulations indicate that satisfying a high degree of acceptability does not entail high welfare losses compared to low degree of acceptability.

Keywords: Environmental; Economics; and; Policy (search for similar items in EconPapers)
Pages: 32
Date: 2005
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Citations: View citations in EconPapers (1)

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Journal Article: Acceptable reforms of agri-environmental policies (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea05:19150

DOI: 10.22004/ag.econ.19150

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