Agri-environmental Policy in the European Union: Who's in Charge?

Kathy Baylis, Stephen Peplow, Gordon Rausser and Leo Simon

No 24162, Commissioned Papers from Canadian Agricultural Trade Policy Research Network

Abstract: The EU has argued that some agricultural subsidies are needed to provide the optimal amount of externalities (both positive and negative) produced by agriculture. The argument is that agriculture is "multifunctional" and externalities such as rural development and landscape would be underproduced, while some forms of pollution (such as nitrogen runoff) would be overproduced without government intervention. Meanwhile, the United States has raised the concern that multifunctionality is primarily an argument to transfer income to producers. One way to try and determine how much of these non-commodity payments are directed to externalities and how much is intended to distribute income to producers is to analyze the variation of the programs among the different member states of the EU. We estimate the degree to which environmental characteristics, agricultural characteristics and political economy variables determine the objective and amount of funding each member states uses to address environmental externalities (both positive and negative). Results indicate that little of the variance in agri-environmental expenditure can be explained by the difference in negative externalities, neither is there clear evidence that the payments are substituting for traditional agricultural subsidies. However, demand for environmental services and political variables seem to be the driving motivators behind a country's decision to spend money on agri-environmental programs.

Keywords: Environmental; Economics; and; Policy (search for similar items in EconPapers)
Pages: 23
Date: 2006
References: Add references at CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://ageconsearch.umn.edu/record/24162/files/cp060004.pdf (application/pdf)

Related works:
Working Paper: Agri-environmental Policy in the European Union: Who's in Charge? (2006)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:catpcp:24162

DOI: 10.22004/ag.econ.24162

Access Statistics for this paper

More papers in Commissioned Papers from Canadian Agricultural Trade Policy Research Network Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().