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The Effect of Mandatory Agro‐Environmental Policy on Farm Fertiliser and Pesticide Expenditure
Author(s) -
Jaraitė Jūratė,
Kažukauskas Andrius
Publication year - 2012
Publication title -
journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.157
H-Index - 61
eISSN - 1477-9552
pISSN - 0021-857X
DOI - 10.1111/j.1477-9552.2012.00346.x
Subject(s) - incentive , payment , business , compliance (psychology) , public economics , direct payments , environmental policy , agricultural economics , economics , natural resource economics , agricultural science , finance , microeconomics , environmental science , psychology , social psychology
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.