Environmental and socioeconomic impact of the new cotton reform

Following the decoupling of the cotton subsidies in 2006 the production system has become less intensive in input usage with an average yield reduction of 40 per cent. Albeit the farm income has not been reduced, the reform has had a negative effect on the economy of some rural areas of Southern Spain, where there are few productive alternatives to cotton, with a 39% reduction of direct farm labour. Besides, the reform has been borne by the ginning industry (60% reduction), the agrochemical suppliers and the auxiliary sector. On the other hand, the environment has benefits from the extensification of the cotton production since three quarter of the production is now carried out under integrated production that implies a reduction in the amount of fertilizers and pesticides that farmers can use.cotton, CAP reform, decoupling, Spain, Agricultural and Food Policy, Environmental Economics and Policy,

Effects of the decoupling of the subsidies on agricultural water productivity

In this work several performance indicators such as the Annual Relative Irrigation Supply (ARIS) and the Irrigation Water Productivity (IWP), have been considered to evaluate the changes in the cotton irrigation management due to the decoupling of the European Union Subsidies. For this purpose, a modern irrigation scheme, the Genil–Cabra Irrigation Scheme (GCIS) located in Southern Spain, has been selected. The total irrigated area is 6,900 ha with wheat, olive and cotton as the main crops. The irrigation season 2004/05 was the period when the crop pattern and water management trend changed dramatically. From this year to the present the area cultivated with crops with high water requirements like cotton, sugar beet and maize has been reduced almost by half, while the area with low irrigation requirement crops (winter cereals, sunflower or olive) has increased of 37%. After the decoupling of the EU cotton subsidies in 2006, the cotton agricultural practices have changed toward a less intensive production system, including both, lower water application (ARIS for cotton decreased from values higher than 0.8 to 0.5 in the irrigation season 2006/07) and less agrochemical usage. In terms of sustainability, the reform has increased the cotton irrigation efficiency (IWP for cotton increased from around 0.7 €/m3 to 1.0 €/m3 in the irrigation season 2006/07) and has reduced its environmental impact.CAP Subsidies, Irrigation, Arable Crops, Spain, Agricultural and Food Policy, Resource /Energy Economics and Policy,

Comparative Performance of Selected Mathematical Programming Models

This study compares the predictive performance of several mathematical programming models. Using the cropping patterns, yields and crop gross margins of eighteen farms over a period of five years we compare the models' optimum solutions with observed crop distributions after the Reform of the EU Common Agricultural Policy of 1992. The results show that the best prediction corresponds to a model that includes expected profit and a qualitative measure of crop riskiness. The results suggest that, in order to obtain reliable predictions, the modelling of farmers' responses to policy changes must consider the risk associated with any given cropping pattern. Finally, we test the ability of the proposed model to reproduce the farmers' observed behaviour with equally good performance under conditions of limited data availability.model performance, mathematical programming, modelling, decision-making, Resource /Energy Economics and Policy,

Suitability assessment of olive plantations for Iberian Lynx habitat restoration

This study adopts a twofold methodological approach to assessing the suitability of agricultural areas for wildlife habitat restoration. Embedding expert judgements through an Analytic Hierarchy Process (AHP) and Geographical Information Systems (GIS) about the effect of specific elements of the landscape on Iberian lynx (Lynx pardinus) habitat restoration potentiality as an indicator of selection of the most suitable agricultural areas to be transformed to the natural state (Mediterranean forest and scrublands). The case study is the olive (Olea europaea L.) plantations of the mountain areas of Andalusia (Spain) which, because of their low yield, are likely to be abandoned after the decoupling of the EU olive oil subsidies. The results suggest that the edge of major agricultural areas (mostly olive groves), the natural vegetation and areas adjacent to Natural Park with oaks would be most suitable for wildlife habitat restoration. These results are in agreement other studies carried out by other researchers on biodiversity, based on either individual or groups of species.analytic hierarchy process (AHP), GIS, Lynx pardinus, habitat restoration, Spain, Resource /Energy Economics and Policy,

Demand for Non-Commodity Outputs from Spanish Extensive Agricultural Systems

Agricultural multifunctionality is the recognition of the joint exercise of economic, environmental and social functions by this sector. In order to make this concept operative to support the design of public policies, it is necessary to estimate the social demand for such functions. The main objective of this article is to present two empirical applications in this line. For this purpose we have adopted the agricultural system of mountain olive groves in Andalusia (Southern Spain) at risk of abandonment after the decoupling of the EU subsidies and the agricultural system of cereal steppes in Tierra de Campos (North-western Spain). The economic valuation technique used is the Choice Experiment. The results suggest the existence of a significant demand for the different functions, although the demand is heterogeneous, depending on the socio-economic characteristics of the individuals surveyed.Agricultural multifunctionality, Economic valuation, Choice experiments, extensive agriculture, Andalusia, Castilla-Leon (Spain), Farm Management,

MCDM Farm System Analysis for Public Management of Irrigated Agriculture

In this paper we present a methodology within the multi-criteria paradigm to assist policy decision-making on water management for irrigation. In order to predict farmers' response to policy changes a separate multi-attribute utility function for each homogeneous group, attained applying cluster analysis, is elicited. The results of several empirical applications of this methodology suggest an improvement of the ability to simulate farmers' decision-making process compared to other approaches. Once the utility functions are obtained the policy maker can evaluate the differential impacts on each cluster and the overall impacts in the area of study (i.e. a river basin) by aggregation. On the empirical side, the authors present some studies for different policy instruments including water pricing, water markets, modernization of irrigation systems and a combination of them.multi-attribute utility theory, water management, irrigation, policy analysis, Agricultural and Food Policy, Q25, Q15, C61,

Local water markets for irrigation in southern Spain: A multicriteria approach

Spanish authorities have recently approved a new legislative framework for the creation of local water markets to improve allocative efficiency for this scarce resource. This paper analyses the potential impacts of the policy. A utility function for three groups of farmers was elicited, using a method that does not require interaction with the decision‐makers. Utility was measured as a function of the first two moments of the distribution of total gross margin. The utility functions were then used to simulate farmers' responses to changes in the price of water.Resource /Energy Economics and Policy,

MULTI-CRITERIA ANALYSIS OF FACTORS USE LEVEL: THE CASE OF WATER FOR IRRIGATION

In this paper we present a methodology to analyse input use in the agricultural sector. The novelty of the theoretical model explained is that it has been developed considering a multi-criteria environment. Thus, the optimal input use condition is determined by the assessment of "multi-attribute utility" and "multi-attribute marginal utility". We show how the approach adopted in this paper is a generalization of the single-attribute expected utility theory. The theoretical model developed is further implemented in an empirical application that studies water for irrigation use as a particular case. Results show how multi-attribute utility functions elicited for a sample of 52 irrigators explain differences on irrigation water use in relative homogenous agricultural systems, albeit exhibiting similar water partial utility functions. We conclude that these differences come from the dissimilar weights that farmers attached to each attribute in the aggregate utility function. The irrigated area considered as case study is located in North-western Spain.Resource /Energy Economics and Policy,

Agricultural Risk Aversion Revisited: A Multicriteria Decision-Making Approach

In modelling farm systems it is widely accepted that risk plays a central role. Furthermore, farmers' risk aversion determines their decisions in both the short and the long run. This paper presents a methodology based on multiple criteria mathematical programming to obtain relative and absolute risk aversion coefficients. We rely on multiattribute utility theory (MAUT) to elicit a separable additive multiattribute utility function and then estimate the risk aversion coefficients and apply this methodology to an irrigated area of Northern Spain. The results show a wide variety of attitudes to risk among farmers, who mainly exhibit decreasing absolute risk aversion (DARA) and constant relative risk aversion (CRRA).Risk analysis, Agriculture, Utility theory, Multiple criteria analysis, Risk and Uncertainty,

Viability of the Raw Cotton Production in Spain After the Decoupling of the Subsidies

Considering the latest reform of the EU's Cotton Regulation of 29th April 2004, which will come into force in the 2006/07 season, we analyse its impact on the cotton production sector of Andalusia. The decoupling of subsidies implies that producers will be entitled to 65 percent of the amount received in the reference period (three years) irrespective of the crop chosen to grow. The remaining 35 percent (slightly higher) is paid as cotton are a payment. In this research, first from a survey carried out in 2004 we obtained six groups of producers using fact or analysis and cluster analysis. Then, based on this characterization, we assess the impact of two policy scenarios: (a) the implementation of the reform without any additional measures, and (b) the addition of a complementary environmentally based area payment plus the modulation of the decoupled subsidy up to 50 percent according to raw cotton quality. In the first scenario most producers would reduce the use of inputs to a minimum and leave the raw cotton in the fields. In the second scenario the production of cotton would shift from conventional toward Integrated Production with a reduction of 30% with respect to the current hectarage.Cotton, Spain, Mid-Term Reform, Simulation, Multi-Criteria Decision Making, Agricultural and Food Policy, Crop Production/Industries,