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Interactions between CAP Agricultural and Agri-Environmental Subsidies and Their Effects on the Uptake of Organic Farming

Artikel i vetenskaplig tidskrift
Författare Mónica Marcela Jaime Torres
Jessica Coria
Xiangping Liu
Publicerad i American Journal of Agricultural Economics
Volym 98
Nummer/häfte 4
Sidor 1114-1145
ISSN 0002-9092
Publiceringsår 2016
Publicerad vid Institutionen för nationalekonomi med statistik, Enheten för miljöekonomi
Institutionen för nationalekonomi med statistik
Sidor 1114-1145
Språk en
Länkar http://dx.doi.org/10.1093/ajae/aaw...
Ämnesord Agricultural economics, environmental subsidies, organic farming
Ämneskategorier Nationalekonomi, Ekonometri

Sammanfattning

We analyze the effects of the interactions that the two pillars of the European Union Common Agricultural Policy—market support and rural development—have on farmers’ uptake of organic farming practices. Special attention is given to the 2003 reform, which substantially altered the relative importance of the two types of support by decoupling direct agricultural payments from the production of a specific crop. In our empirical analysis we study the case of Sweden, making use of the variation in the timing of farmers’ decisions regarding participation in support programs. We estimate a dynamic non-linear unobserved effects probit model to account for unobserved individual heterogeneity and state dependence. Our results indicate the existence of a negative effect of the market support system in place when organic farming techniques were adopted before the 2003 reform. However, this effect is reversed by the introduction of decoupling. Furthermore, the effects of support differ between certified and non-certified organic production: both pillars have significant effects on non-certified organic farming, whereas certified organic farming is exclusively driven by agro-environmental subsidies.

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