ARE PRODUCTION TECHNOLOGIES ASSOCIATED TO AGRI-ENVIRONMENTAL PROGRAMS MORE ECO-EFFICIENT? A CASE STUDY FOR RAIN-FED AGRICULTURE

Mercedes Beltrán-Esteve, José A. Gómez-Limón and Andres Picazo-Tadeo
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Mercedes Beltrán-Esteve: Departamento de Economía Aplicada II. Universidad de Valencia
José A. Gómez-Limón: Departamento de Economía Agraria. Instituto Andaluz de Investigación y Formación Agraria y Pesquera. Córdoba

No 1115, Working Papers from Department of Applied Economics II, Universidad de Valencia

Abstract: This paper analyses the impact of the Agri-environmental Extensification Scheme for the Protection of Flora and Fauna (F&F Scheme) on the eco-efficiency of a sample of dryland farms in the Spanish region of Castile and Leon. We explore whether or not the production technology of the farms included in the F&F Scheme is more eco-efficient than the technology used by farms that are not included in the Scheme, employing Data Envelopment Analysis (DEA) and the program decomposition proposed by Charnes et al. (1981) to do so. The results obtained confirm the foregoing hypothesis, providing evidence that environmental pressures could be reduced if all farms adopted the F&F Scheme technology. Furthermore, shadow prices are used to assess the monetary value of the potential reduction in environmental pressures that farms could achieve by adopting the F&F Scheme. The results show that the average opportunity cost of the decrease in environmental pressures (€55.65/ha) is similar to the compensation received by farms included in the F&F Scheme. Nevertheless, bearing in mind the great diversity of farms, we recommend agricultural policymakers to use an auction system to award such environmental contracts.

Keywords: Data Envelopment Analysis; economic-ecological efficiency; shadow prices; agri-environmental policy (search for similar items in EconPapers)
JEL-codes: C61 D21 Q18 Q57 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2011-06
New Economics Papers: this item is included in nep-agr, nep-eff and nep-env
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http://repecsrv.uv.es/paper/RePEc/pdf/eec_1115.pdf First version, 2011 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:eec:wpaper:1115

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