Adoption of environmentally-friendly agricultural practices with background risk: experimental evidence

Farmers choose to avoid some risks by not engaging into practices with uncertain profits. Yet, they still face background risk beyond their control, such as climate change. The impact of background risk on decisions to adopt risky environment-friendly agricultural practices is analysed through a theoretical model and a public good experiment. We find that background risk discourages adoption, despite the fact that it affects both environmentally-friendly and conventionally farmed land equally. An incentive payment increases adoption but is significantly less efficient in the presence of both foreground and background risks. Results shed light on potential synergies between greening the CAP and supporting risk management

Adoption of environmentally-friendly agricultural practices with background risk: experimental evidence

Farmers choose to avoid some risks by not engaging into practices with uncertain profits. Yet, they still face background risk beyond their control, such as climate change. The impact of background risk on decisions to adopt risky environment-friendly agricultural practices is analysed through a theoretical model and a public good experiment. We find that background risk discourages adoption, despite the fact that it affects both environmentally-friendly and conventionally farmed land equally. An incentive payment increases adoption but is significantly less efficient in the presence of both foreground and background risks. Results shed light on potential synergies between greening the CAP and supporting risk management

Do Security-differentiated Water Rights Improve Efficiency?

Most existing water markets combine water rights trading and water allocation trading. Offering different levels of security for rights can make the market more sophisticated and allow water users to manage the risks of supply uncertainty better. We compare results from a laboratory experiment with two water right designs, one with a unique security level and another with two security levels. We find that a two security levels system improves both allocative eciency and risk management, but only when transactions costs are higher in the market for water allocation than in the market for water rights.Crude Oil Pricing, Currency Basket, OPEC, Exchange Rate of Dollar, Euros, Yen.

The influence of the Common Agricultural Policy on agricultural landscapes

Agriculture is both a large‐scale user of land and a provider of landscapes. The adaptation of agricultural practices to local conditions has led to a wide variety of "cultural landscapes" in Europe. The Common Agricultural Policy being a major driver of land use and farming practices change in Europe, it also affects landscapes. The report analyzes how the CAP design and implementation have influenced the agricultural landscapes. It provides a catalogue of CAP measures that have been and are currently influencing landscapes are presented, as well as the expected effects derived from the proposal for the post 2013 CAP. It differentiates between Pillar 1 and Pillar 2, and between measures with a direct focus on landscapes vs. non‐targeted measures which also have the potential to have an influence (positive or negative)). The olive and livestock sectors, where the influence of CAP on landscape is of particular interest, are also analyzed. By providing a list of the potential influences of the CAP on the landscape elements and structures valued by EU citizens, this report provides a knowledge base to support an effective CAP policy design in the direction of improved landscape management, an important component of EU project towards a more sustainable agriculture.JRC.J.4-Agriculture and Life Sciences in the Econom

La gestion du manque d’eau structurel et des sécheresses en France

Cet article s’intéresse aux politiques et dispositifs de gestion du manque d’eau et des sécheresses en France. La première partie décrit les politiques et dispositifs existants, en distinguant la gestion quantitative des volumes d'eau et la gestion par les prix ainsi que les politiques structurelles et les politiques conjoncturelles. La seconde partie discute des politiques et dispositifs envisageables en France. Cela inclut des politiques incitant aux adaptations au niveau des exploitations, une réforme de la gestion de crise et des dispositifs de tarification et d’échange de droits qui pourraient être différenciés selon les utilisateurs, l’état de la ressource et la situation météorologique. Ces nouveaux dispositifs sont par ailleurs compatibles avec la réforme en cours et la mise en place des organismes uniques de gestion collective (OUGC) à l’échelle locale. / This article deals with policies and management measures addressing water scarcity and droughts in France. The first part describes existing practices, differentiating between quota and pricing instruments and between structural and temporary measures. The second part discusses policies and measures that could be applied in France. It includes policies providing incitation to support farm-level adaptations, a reform of current crisis management and pricing and market measures that could be differentiated depending on the end-user, the state of the resource and the weather conditions. Moreover, these measures fit in the current policy reform and the introduction of local institutions for collective water management, called OUGC

European farmers' intentions to invest in 2014-2020: survey results

The present study aims to analyse farmers’ intentions to invest in the period 2014-2020, focussing on investments in land, buildings, machinery and equipment, training, and quotas and production rights. It provides up-to-date information on EU farm investment patterns that is not otherwise available in traditional agricultural statistics (such as Farm Accountancy Data Network or the Eurostat Farm Structure Survey). Use of the data in this study contributes to the general understanding of the determinants of investment decisions and farmers’ reaction to EU Agricultural policy.JRC.J.4-Agriculture and Life Sciences in the Econom

Adoption of environment-friendly agricultural practices with background risk: experimental evidence

Agriculture is one of the economic sectors most exposed to exogenous risks such as climate hazards and price volatility on agricultural markets. Agricultural policies targeting the adoption of environment-friendly but potentially risk-increasing practices cannot ignore this challenge. Farmers have indeed to decide if they take the foreground risk associated with the adoption of environment-friendly practices, while simultaneously facing exogenous background risk beyond their control. Using a theoretical model and a public good experiment, we analyse the adoption of agri-environmental practices and the effect of agri-environmental subsidies in a context where risks are both foreground and background. While most of the literature on background risk focuses on its impact on individual decisions, we analyse the influence of background risk in a context of strategic uncertainty (contribution to a public good). The results highlight the potential synergies between greening the CAP and supporting risk management. We find that background risk discourages the adoption of green practices, although it affects all farmland independently from the farmer’s choice of practices (environment friendly or conventional). An incentive payment per hectare of land farmed with green practices increases the adoption of risk-increasing practices but is significantly less effective in the presence of background risk

(How) can economic experiments inform EU agricultural policy?

This report provides an overview of the potential contribution of economic experiments to the Common Agricultural Policy evaluation toolbox. The methodology of economic experiments is briefly described in chapter 2. Chapter 3 presents examples of experimental studies relevant for the analysis of the Common Agricultural Policy. Chapter 4 discusses whether there is room for economic experiments in the EU evaluation toolbox. Chapter 5 identifies the main challenges when implementing economic experiments. Chapter 6 provides a set of recommendations, arising from the discussions between the authors of this report and policy officers from DG AGRI, relative to the introduction of economic experiments in the CAP evaluation toolbox.JRC.J.4-Agriculture and Life Sciences in the Econom

Can economic experiments contribute to a more effective CAP?

In order to keep pace with the evolution of the objectives and means of the EU's Common Agricultural Policy, evaluation tools also need to adapt. A set of tools that have proved highly effective in other policy fields is economic experiments. These allow the testing of a new policy before its implementation, provide evidence of its specific effects, and identify behavioural dimensions that can influence policy outcomes. We argue that agricultural policy should be subject to economic experiments, providing examples to illustrate how they can inform CAP design. We identify the additional efforts needed to establish further proof-of-concept, by running more – and more robust – experiments related to the CAP. This can happen only by integrating experimental evaluation results within the policy cycle and addressing ethical and practical challenges seriously. To do so, researchers would benefit from a concerted European effort to promote the methodology across the EU; organise the replication in time and across Europe of experiments relevant for the CAP; and build a multi-national panel of farmers willing to participate in experiments. Steps are being taken in this direction by the Research Network of Economics Experiments for CAP evaluation (REECAP)

Insights from Amphioxus into the Evolution of Vertebrate Cartilage

Central to the story of vertebrate evolution is the origin of the vertebrate head, a problem difficult to approach using paleontology and comparative morphology due to a lack of unambiguous intermediate forms. Embryologically, much of the vertebrate head is derived from two ectodermal tissues, the neural crest and cranial placodes. Recent work in protochordates suggests the first chordates possessed migratory neural tube cells with some features of neural crest cells. However, it is unclear how and when these cells acquired the ability to form cellular cartilage, a cell type unique to vertebrates. It has been variously proposed that the neural crest acquired chondrogenic ability by recruiting proto-chondrogenic gene programs deployed in the neural tube, pharynx, and notochord. To test these hypotheses we examined the expression of 11 amphioxus orthologs of genes involved in neural crest chondrogenesis. Consistent with cellular cartilage as a vertebrate novelty, we find that no single amphioxus tissue co-expresses all or most of these genes. However, most are variously co-expressed in mesodermal derivatives. Our results suggest that neural crest-derived cartilage evolved by serial cooption of genes which functioned primitively in mesoderm