Factors Affecting Farmers’ Participation in Agri‐environmental Measures: A Northern Italian Perspective

Agri‐environmental measures play an important role in Italian rural areas, as shown by the financial commitment to the Rural Development programmes. However, in contrast with other European Union (EU) countries, policy‐makers still have limited experience on how farmers approach environmental incentive schemes. This paper casts new light on this issue from a northern Italian perspective. The rationale of the farmers’ decision‐making process is explored using two multinomial models. The first explains the probability of non‐participation or participation in one of three specific agri‐environmental measures. The model outcomes show that labour‐intensive farming types and high dependency of household income on farming activity constrain farmers’ participation, whereas previous experience, easy‐to‐implement environmentally friendly farm practices and adequate compensation of extra costs encourage participation. The second model explores the effect of farmers’ attitudes and beliefs on their predispositions towards participation in any of the schemes. The results highlight that, besides income factors, the farm's future in the business, and the relationship with neighbouring farmers and their opinions on environmentally friendly practices all have significant effects on adoption of agri‐environmental measures. The paper concludes by suggesting that farmers’ attitudes and beliefs, as well as the local behavioural influences, have to be taken into account when designing and communicating agri‐environmental measures.     

Determinants of the Willingness of Belgian Farmers to Participate in Agri‐environmental Measures

This paper explores the willingness of Belgian farmers to participate in two voluntary agri‐environmental policies. Farmers' contingent behaviour is analysed on the basis of survey data. Derivations based on a conceptual micro‐economic model indicate that decision subject and decision maker characteristics are important for farmers' participation. The model is empirically tested through the specification and estimation of a probit model. Consistency is found between the theoretical framework and the empirical results indicating that both the expected effect on farm production and the farmers' environmental attitude, which is more positive among younger and better educated farmers, are significant determinants of the acceptance rate of agri‐environmental policies. Other variables which influence participation decisions are farm size and previous experience of farmers themselves or of neighbouring farmers with agri‐environmental measures.     

Cost and environmental efficiency of rice farms in South Korea

We examine cost and nutrient use efficiency of farms and determine the cost to move farms to nutrient‐efficient operation using Data Envelopment Analysis (DEA) with a dataset of 96 rice farms in Gangwon province of South Korea from 2003 to 2007. Our findings show that improvements in technical efficiency would result in both lower production costs and better environmental performance. It is, however, not costless for farms to move from their current operation to the environmentally efficient operation. On average, this movement would increase production costs by 119% but benefit the water system through an approximately 69% reduction in eutrofying power (EP). The average estimated cost of each EP kg of aggregate nutrient reduction is approximately one thousand two hundred won. For technically efficient farms, there is a trade‐off between cost and environmental efficiency. We also find that the environmental performance of farms varies across farms and regions. We suggest that agri‐environmental policies should be (re)designed to improve both cost and environmental performance of rice farms.     

Challenges and Options for the UK Agri‐Environment: Presidential Address

After fifteen years of agri‐environment policy it is now appropriate to take stock of these policies. This is important because these policies are scheduled to expand in the coming decade, their benefits are likely to continue growing and the demand for benefits is also likely to expand. This paper therefore reviews the current agri‐environmental situation, isolating some of the current challenges to the schemes implemented in the UK, and compares main options for their amelioration. Finally it focuses particularly on the “end of contract problem” arising from the weak sustainability of the policy benefits from short‐term voluntary contracts.     

Modelling Farmers’ Participation in an Agri‐environmental Scheme using Panel Data: An Application to the Rural Environment Protection Scheme in Ireland

Previous studies that have attempted to model the participation decision of farmers in agri‐environmental schemes have used a static framework where it was not possible to examine changes in the participation decision of farmers over time. This is rectified in this paper by utilising an 11‐year panel that contains information on 300 farmers for each year. The structure of this dataset allows us to employ discrete time duration random effects panel data logit models to model the determinants of entering the Irish Rural Environment Protection Scheme (REPS). We introduce a dynamic element into a number of the models by using the random effects logit model estimator, with lagged dependent variables as additional explanatory variables. The results point to the fact that systems of farming that are more extensive and less environmentally degrading remain those most likely to participate in the REPS. In addition, the results highlight the fact that where no attempt is made to control for unobserved heterogeneity or path dependency the effects of the farm‐ and farmer‐specific characteristics may be overestimated.     

Incorporating risk in a positive mathematical programming framework: a dual approach

In this study we develop a new methodological proposal to incorporate risk into a farm‐level positive mathematical programming (PMP) model. We estimate simultaneously the farm nonlinear cost function and a farmer‐specific coefficient of absolute risk aversion as well as the resource shadow prices. The model is applied to a sample of representative arable crop farms from the Emilia‐Romagna region in Italy. The estimation results confirm the calibration ability of the model and reveal the values of the individual risk aversion coefficients. We use the model to simulate different scenarios of crop price volatility, in order to explore the potential risk management role of an agri‐environmental scheme.     

Africa's changing farm size distribution patterns: the rise of medium‐scale farms

This study assesses changes over the past decade in the farm size distributions of Ghana, Kenya, Tanzania, and Zambia, drawing on two or more waves of nationally representative population‐based and/or area‐based surveys. Analysis indicates that much of Sub‐Saharan Africa is experiencing major changes in farm land ownership patterns. Among all farms below 100 hectares in size, the share of land on small‐scale holdings under five hectares has declined except in Kenya. Medium‐scale farms (defined here as farm holdings between 5 and 100 hectares) account for a rising share of total farmland, especially in the 10–100 hectare range where the number of these farms is growing especially rapidly. Medium‐scale farms control roughly 20% of total farmland in Kenya, 32% in Ghana, 39% in Tanzania, and over 50% in Zambia. The numbers of such farms are also growing very rapidly, except in Kenya. We also conducted detailed life history surveys of medium‐scale farmers in each of these four countries and found that the rapid rise of medium‐scale holdings in most cases reflects increased interest in land by urban‐based professionals or influential rural people. About half of these farmers obtained their land later in life, financed by nonfarm income. The rise of medium‐scale farms is affecting the region in diverse ways that are difficult to generalize. Many such farms are a source of dynamism, technical change, and commercialization of African agriculture. However, medium‐scale land acquisitions may exacerbate land scarcity in rural areas and constrain the rate of growth in the number of small‐scale farm holdings. Medium‐scale farmers tend to dominate farm lobby groups and influence agricultural policies and public expenditures to agriculture in their favor. Nationally representative Demographic and Health Survey (DHS) data from six countries (Ghana, Kenya, Malawi, Rwanda, Tanzania, and Zambia) show that urban households own 5–35% of total agricultural land and that this share is rising in all countries where DHS surveys were repeated. This suggests a new and hitherto unrecognized channel by which medium‐scale farmers may be altering the strength and location of agricultural growth and employment multipliers between rural and urban areas. Given current trends, medium‐scale farms are likely to soon become the dominant scale of farming in many African countries.     

Is there a future for small farms in developed countries? Evidence from the French case

This research aims to identify the specific characteristics of small farms in developed countries and the factors that influence their survival and growth. Using the case of France, we employ statistical and econometric analysis of data from the Farm Structure Survey (N = 70,000) for the period 2000–2007. The principal findings suggest that small farms are no more likely than other farms to employ “alternative” strategies to the predominant model of increasing farm size, nor are they more likely to diversify on‐farm activities or operate under quality‐labeled production systems, with the notable exception of organic agriculture. However, where small farms do adopt or practice these activities, they are seen to have a favorable effect in ensuring their survival and growth. In contrast, we are unable to conclude that pluriactivity of farm households has a positive impact on the survival of small enterprises. The effect of geographical location on small farms is largely expressed in their concentration in mountainous or disadvantaged regions. Overall, the trajectory of small farms is marked by farm exit, principally as the result of farmers retiring at the end of their careers. The small farm sector is also revitalized by both larger farms declining and thus being reclassified as small farms, as well as the progressive entry into agriculture of small farm holders whose income was previously derived largely off‐farm.     

The Potential for Cross‐Compliance in Canadian Agricultural Policy: Linking Environmental Goals with Business Risk Management Programs

Environmental cross‐compliance links agricultural program payments to producer commitments to achieve agri‐environmental policy goals. The objective of this study is to determine the feasibility of using cross‐compliance to achieve environmental goals in a Canadian policy context. While Canadian policy makers have flirted with cross‐compliance, with the exception of phosphorus regulations for Quebec hog farms, they have never adopted this approach. The potential for effective cross‐compliance depends on producer participation, producer compliance with regulations, environmental performance, and overall welfare implications. This study reviews the application of cross‐compliance in the United States and EU with regard to the potential application to Canadian agriculture. Policy options are considered which link current business risk management (BRM) programs to alternative environmental regulations (wildlife habitat preservation, nutrient management plans, and beneficial management practices for nutrient management). In general, individual Canadian agricultural support program do not provide sufficient incentives for farmers to participate in cross‐compliance. However, if support programs are combined, it is better to link programs that redistribute income with environmental programs than to link agriculture programs that already address specific market failures.     

Impacts of Decoupled Agricultural Support on Farm Structure,Biodiversity and Landscape Mosaic: Some EU Results

The decoupling of direct payments from production represents a substantial reform of the Common Agricultural Policy (CAP). Farmers are no longer required to produce commodities to be entitled to support but only to keep land in Good Environmental and Agricultural Condition. If output declines as a result, there is concern that landscape services produced jointly with commodities will also decline. The aim of this paper is to assess the long‐term effects of the 2003 reform on farm structure, landscape mosaic and biodiversity for a sample of EU regions. Impacts are quantified using a spatial agent‐based modelling approach by simulating agricultural development with links to indicators of landscape value. Our results demonstrate that eliminating the link between support payments and production has possible negative consequences for the landscape, but only under particular circumstances. It is shown that these effects could be offset by strengthening (Pillar II) agri‐environmental schemes. Further the single payment scheme results in higher land rental prices which reduces its ability to achieve its goal of providing income security for farmers. Implications of these results for the direction of continued CAP reform are discussed.     

Investigating Preferences for the Local Delivery of Agri‐environment Benefits

Since 2005, Environmental Stewardship (ES) has been the principal agri‐environment scheme for England and is the key instrument for the delivery of increased environmental benefits from agricultural landscapes. The main objective of this study is to investigate the hypothesis that individuals have greater relative preferences for the environmental benefits associated with agri‐environment schemes when they are delivered within those landscapes closest to where they live. A choice experiment approach based on a national survey provides the data and a mixed logit approach is used to model relative preferences for the environmental benefits of ES across five generic landscape types. Results show that most respondents have a preference for benefits delivered in those areas closest and most accessible to where they live.     

Protest Responses and Willingness to Accept: Ecosystem Services Providers’ Preferences towards Incentive‐Based Schemes

The identification and treatment of protest responses in stated preference surveys has long been subject to debate. We analyse protest responses while investigating ecosystem services providers’ preferences for incentive‐based schemes. We use a choice experiment for olive farmers’ preferences for agri‐environmental scheme participation in southern Spain. Our two main objectives are: first, to identify and discuss a range of possible motives for protest responses that emerge in a WTA context; second, we analyse the impact on WTA estimates of censoring serial non‐participation linked to protest or high compensation requirements (very high takers). Using a random parameter logit model in WTA space, we find that the inclusion or exclusion of serial non‐participants in the analysis can have a significant impact on marginal and total WTA estimates. Based on the findings, the paper makes recommendations on how to reduce the incidence of protest responses through survey design, regarding the identification of protesters as opposed to very high takers, and regarding the treatment of both groups of respondents for WTA estimation.     

Impact of farmer self-identity and attitudes on participation in agri-environment schemes

Influencing farmers to make positive contributions to the environment is one of the goals of agri-environment schemes (AESs). Understanding the drivers of farmer behaviour and the choices they make with regards to AESs is important as this aids policy makers in creating schemes that have a wider scope and are more likely to achieve environmental goals. Past studies have identified the importance of farmer self-identity and attitudes in decisions made on farms. Little emphasis has been put on modelling the relationship between self-identity and attitudes towards schemes and the resulting impact on participation in voluntary AESs. Using Ireland as a case-study, this paper employs a survey of 1000 farms to look at participation in AESs through the lens of farmer perceived self-identity and their attitudes towards schemes. A relatively novel approach of combining factor analysis, to generate a self-identity typology, with an AES participation regression model is implemented. The model results suggest that self-identity and attitudes have a significant impact on AES participation. Neighbouring farmers’ viewpoints also have a significant and positive impact on the participation decision made by farmers.     

Hog Industry Structure and the Stringency of Environmental Regulation

The paper develops a comparative statics model of long‐run industry equilibrium in the presence of size‐based environmental regulation stringency and applies the model to the U.S. hog industry. The economic model shows that when size‐based environmental stringency is also size biased, large farms downsize, expand, or do neither depending on how environmental stringency shifts their marginal production cost relative to their average cost. Empirical testing using data from the top‐ten hog‐producing states suggests that environmental regulation stringency has limited impact on small farms and leads to a reduction in the number of large farms. Results cannot reject positive size bias at the farm level due to the stringency of environmental regulation.     

A discrete‐time hazard analysis of the exit of burley tobacco growers in Tennessee,North Carolina,and Virginia

This article examines the exit and survival dynamics of burley tobacco growers in Tennessee, North Carolina, and Virginia using a discrete‐time hazard logit model. The study also predicts the effects of selected farm and family characteristics on exit hazards, assesses the proportionality of their effects over time and their relative importance in explaining the variation in exit hazards among burley tobacco growers. Results provide the longitudinal progression of the probability of exiting the tobacco industry since the end of the federal tobacco program in 2004, and identify off‐farm participation, percentage of farm receipts from tobacco, tobacco price, educational level, and farm size as the most important determinants of the decision to exit the tobacco industry. Further, the effects of off‐farm participation and farm size on the exit hazards of burley tobacco farms are proportional over time while the effects of the percentage of farm receipts from tobacco and tobacco price are time variant.     

A supply‐side analysis of agritourism: Evidence from farm‐level agriculture census data in Taiwan

Due to consumers’ increased demand for leisure and farmers’ need for income diversification, researchers and policymakers have significant interest in topics related to agritourism. This study provides a supply‐side analysis on agritourism using Taiwan as a case study. Utilising a sample of 720,148 family farms from the 2010 agriculture census survey in Taiwan, we quantify the effects of engaging in the agritourism business on farm income, on farm succession, and on family members’ labour supply decisions between on‐farm and off‐farm work. An analytical framework that combines the doubly robustness regression model and semiparametric estimation is proposed to address the endogeneity bias. Results indicate that participation in agritourism increases farm income and family farm succession. Farms engaging in agritourism also have more family members working on the farm, and fewer family members working off‐farm, compared to farms not engaging in agritourism. Although agritourism enterprises are developed to meet consumers’ demand for leisure, our results show that they also improve the economic welfare of farm households.     

An Investigation of Policy Administrative Costs Using Panel Data for the English Environmentally Sensitive Areas

This paper explores transactions costs in the context of agri‐environmental policy schemes based on management agreements. While transactions costs encompass a wide range of organisational costs, the focus here is on the public‐sector administrative costs of policy implementation. Empirical administrative cost functions were estimated to investigate the factors affecting the magnitude of such costs, using panel data spanning five years for the 22 English Environmentally Sensitive Areas. The extent of participation appears to be important in explaining administrative cost variability across areas. The data suggested the existence of size economics with regard to the numbers of agreements made in any one ESA, and a significant effect of scheme experience in exerting downwards‐pressure on administrative costs. Policy budgeting and evaluation should take into account the non‐trivial costs of organisation, particularly if agri‐environmental schemes based on the procurement of conservation goods through management agreements are to be extended in future.     

Statistical Modelling of Incentive Design Under Limited Information ‐ The Case of Public Access to Farmland

This paper explores the use of statistical modelling to aid efficient policy design for the provision of environmental goods on farms under conditions of adverse selection. The specific case of incentive‐based schemes to enhance the supply of public access to farmland is used as an example. A range of site willingness‐to‐pay (WTP) distributions are used to explore the benefits derived from policies designed under different levels of information. Where no individual farm information is available, low payment rates are optimal, but efficient market creation may not be possible. Increasing the information set allows discretion in pricing and entry: optimal payment rates and net benefits are higher and the pay‐off from procuring improved information can be substantial. Such benefits are reduced where there is a welfare cost associated with increased government expenditure. Optimal policies are sensitive to the skewness of the WTP distributions. Mechanisms for increasing the information set available to policy makers are discussed.     

The Effect of Mandatory Agro‐Environmental Policy on Farm Fertiliser and Pesticide Expenditure

EU farmers are subject to mandatory cross‐compliance measures, requiring them to meet environmental conditions to be eligible for public support. These obligations reinforce incentives for farmers to change their behaviour towards the environment. We apply quasi‐experimental methods to measure the causal relationship between cross‐compliance and some specific farm environmental performance. We find that cross‐compliance reduced farm fertiliser and pesticide expenditure. This result also holds for farmers who participated in other voluntary agro‐environmental schemes. However, the results do not support our expectations that farmers who relied on larger shares of public payments had a stronger motivation to improve their environmental performance.