Agri-environmental Policy in the European Union: Who's in Charge?

European Union (EU) agri-environmental programmes (AEPs) represent a significant step in the region's efforts to decouple agricultural output from production and export subsidies. While AEPs comprise only a small share of EU agricultural support, they have two possible external impacts: 1) the composition of the EU's imports and exports may change as their producers become more market responsive; and 2) the WTO's Green Box (subsides considered minimally trade distorting and hence not disciplined) may become increasingly contentious. Our concern is with the drivers of AEPs in the EU and their implications for Canada.Environmental Economics and Policy,

CAUSES OF MULTIFUNCTIONALITY: EXTERNALITIES OR POLITICAL PRESSURE

Resource /Energy Economics and Policy,

Agri-environmental Policy in the European Union: Who's in Charge?

The EU has argued that some agricultural subsidies are needed to provide the optimal amount of externalities (both positive and negative) produced by agriculture. The argument is that agriculture is "multifunctional" and externalities such as rural development and landscape would be underproduced, while some forms of pollution (such as nitrogen runoff) would be overproduced without government intervention. Meanwhile, the United States has raised the concern that multifunctionality is primarily an argument to transfer income to producers. One way to try and determine how much of these non-commodity payments are directed to externalities and how much is intended to distribute income to producers is to analyze the variation of the programs among the different member states of the EU. We estimate the degree to which environmental characteristics, agricultural characteristics and political economy variables determine the objective and amount of funding each member states uses to address environmental externalities (both positive and negative). Results indicate that little of the variance in agri-environmental expenditure can be explained by the difference in negative externalities, neither is there clear evidence that the payments are substituting for traditional agricultural subsidies. However, demand for environmental services and political variables seem to be the driving motivators behind a country's decision to spend money on agri-environmental programs.Environmental Economics and Policy,

Causes of Multifunctionality: Externalities or Political Pressure?

The EU has argued that some agricultural subsidies are needed to provide the optimal amount of externalities (both positive and negative) produced by agriculture. The argument is that agriculture is "multifunctional" and externalities such as rural development and landscape would be underproduced, while some forms of pollution (such as nitrogen runoff) would be overproduced without government intervention. Meanwhile, the United States has raised the concern that multifunctionality is primarily an argument to transfer income to producers. In this paper, we discuss the motivation for the EU agri-environmental measures and empirically test for those underlying causes. We find that the programs are not targeted at those regions with the highest environmental need, but neither are they purely a substitute for traditional forms of agricultural subsidies. Demand for general environmental expenditure does influence agri-environmental expenditure as well, as does political structure.Environmental Economics and Policy,

What causes a cabinet to change its mind? the British farmer and the state 1818-2004

The two centuries from 1818 to 2004 cover profound social and economic changes in what was, for much of the period, the most powerful country in the world. Britain led the way in moving capital and labour out of agriculture and into newer industries, such as coal-mining, textiles and transportation. The changes were accompanied by deep institutional changes, especially in the franchise. The rate of change is remarkable: within seventy years Britain was almost completely democratic, in contrast to the 'rotten boroughs' and virtual feudalism of the pre- 1832 unreformed Parliaments. The changes are mirrored in the role given to agriculture within society, and in particular the amount and type of economic rent transferred from the consumer and the taxpayer to the farmer. This thesis uses two centuries of data and 'survival analysis' statistical techniques to show that Olson's celebrated theory of collective action can be substantiated in a dynamic context. I show that as the share of farmers in the workforce diminishes, and their relative wealth shrinks, the probability of the Cabinet increasing protection grows. The reverse is also the case, showing that the Cabinet responds positively to pressures from a group whose utility was diminishing.Land and Food Systems, Faculty ofGraduat

Agricultural rent in the early Victorian era

This thesis concerns the economic and political relationship between the English tenant farmer, his landowner, and his Member of Parliament during the period between 1830 and 1865. Profound social and economic changes took place in agriculture during this time, notably the enfranchisement of the tenant farmer (1832), the Repeal of the Corn Laws (1846), and the development of the railways from 1832 onwards. The tenant farmer was an important actor in all three changes, but his role has been overlooked. This thesis brings him into focus in three chapters, each dealing with the tenant-farmer within the rural economy. Chapter 1 introduces the research project, makes a clear statement of the goals of the research, and reviews some of the recent literature. Chapter 2 deals with the ways in which agricultural rents were set in the 1830s and estimates agricultural rents from two centuries ago, using observations for nearly six hundred parishes in the southwest of England. The finding is that rents were set closely with Ricardian Rent Theory. Chapter 3 measures the impact on agricultural rents of railway development. The railways were laid from 1832 onwards, and farmers used the railways to take their stock to market. This saved large amounts of money, primarily from reduced loss of condition compared to droving to market. The social savings were approximately 1.1 per cent of GDP, a considerable sum. The chapter shows that about one fifth of the wealth transfer resulted from cheaper transportation, while the other four-fifths resulted from productivity gains as farmers rearranged their output to take advantage of the railways. Chapter 4 measures the impact of the agricultural interest on the voting decisions of Member of Parliament during the Corn Laws crisis in 1846. This chapter shows that tenant farmers had a small but measureable influence on voting decisions.Land and Food Systems, Faculty ofGraduat

Agri-environmental policies in the EU and United States: A comparison

Agri-environmental policies (AEPs) in the United States and the European Union are examples of payments for environmental services that pay farmers to reduce the negative externalities of agricultural production, while serving as a means to transfer public funds to farmers. We show that despite similar origins, AEPs in the two regions differ both in their specific objectives and in their implementation. For example, AEPs in most member states of the EU-15 have the additional objective of using agriculture as a driver for rural development. This objective is achieved by compensating farmers for the private delivery of positive public goods, such as attractive landscapes, produced by agriculture. The rationale is market failure, and there is empirical evidence that Europeans are willing to pay for such positive externalities. No comparable provision exists in U.S. policy. By contrast, U.S. AEPs focus almost entirely on reducing agriculture's negative externalities, such as soil erosion. Second, we find that U.S. programs are more targeted than their EU counterparts, and take opportunity cost into account. The EU programs, on the other hand, address a wider range of externalities, and are focused more on the paying for a particular farming process than reducing specific negative externalities. The EU takes a broader view of AEPs than does the United States, both in terms of type of activity that can be funded, and by using less targeting by land characteristics, and so the European program could be more easily used as a mechanism for transferring income to producers. Despite this, we find evidence that many of the amenities targeted by the programs are demanded by the population.

Agri-environmental Policy in the European Union: Who's in Charge?

European Union (EU) agri-environmental programmes (AEPs) represent a significant step in the region's efforts to decouple agricultural output from production and export subsidies. While AEPs comprise only a small share of EU agricultural support, they have two possible external impacts: 1) the composition of the EU's imports and exports may change as their producers become more market responsive; and 2) the WTO's Green Box (subsides considered minimally trade distorting and hence not disciplined) may become increasingly contentious. Our concern is with the drivers of AEPs in the EU and their implications for Canada

Agri-environmental Policy in the European Union: Who's in Charge?

The EU has argued that some agricultural subsidies are needed to provide the optimal amount of externalities (both positive and negative) produced by agriculture. The argument is that agriculture is "multifunctional" and externalities such as rural development and landscape would be underproduced, while some forms of pollution (such as nitrogen runoff) would be overproduced without government intervention. Meanwhile, the United States has raised the concern that multifunctionality is primarily an argument to transfer income to producers. One way to try and determine how much of these non-commodity payments are directed to externalities and how much is intended to distribute income to producers is to analyze the variation of the programs among the different member states of the EU. We estimate the degree to which environmental characteristics, agricultural characteristics and political economy variables determine the objective and amount of funding each member states uses to address environmental externalities (both positive and negative). Results indicate that little of the variance in agri-environmental expenditure can be explained by the difference in negative externalities, neither is there clear evidence that the payments are substituting for traditional agricultural subsidies. However, demand for environmental services and political variables seem to be the driving motivators behind a country's decision to spend money on agri-environmental programs