Agricultural Policies and Agri‐Environmental Regulation: Efficiency versus Political Perspectives

Jonathan Kaminski and Eli Feinerman

No 290014, Discussion Papers from Hebrew University of Jerusalem, Department of Agricultural Economics and Management

Abstract: This paper theoretically investigates the joint and endogenous determination of both production and agri‐ environmental transfers in developed countries' agriculture. While agri‐environmental regulation is motivated by market failures in the delivery of environmental benefits (soil cover, landscapes, pollution abatement, and so on), production support may only be due to political interests. We then explore how both policy instruments interact and how political economic factors—namely farmers' special interest groups, inequality aversion, and partial concerns for environmental amenities—induce deviation from first‐best and second‐best policies. More inequality‐averse and more amenity‐oriented policy‐makers, as well as social and cultural differences in citizens' preferences for agricultural landscapes between the EU and the US, can explain differences in support levels, trends, and composition. This also supports the evidence that agri‐ environmental regulation is more effective and individual‐specific in the US than in the EU. Finally, we conclude that future WTO negotiations and policy reforms can partially restore efficiency

Keywords: Agricultural and Food Policy; Environmental Economics and Policy; Political Economy (search for similar items in EconPapers)
Pages: 46
Date: 2010-12
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Persistent link: https://EconPapers.repec.org/RePEc:ags:huaedp:290014

DOI: 10.22004/ag.econ.290014

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