Evaluating the potential contribution of contract auctions to Agri-Environmental Policy efficiency: A simulation model for Emilia-Romagna (Italy)

Auctions are a potentially suitable policy tool for increasing the efficiency of Agri- Environmental Schemes (AES) through an improved allocation of contracts. In theory, through the auction mechanism, farmers have incentives to reveal their compliance costs, helping to reduce information rents and increase policy cost-effectiveness. The aim of this paper is to simulate the potential contribution of auction mechanisms to the efficiency of AES in Emilia-Romagna (Italy). The results show advantages for auctions compared with traditional flat rate payments based on average compliance costs. However, their performance is worse than flat payments based on marginal compliance costs.Auction, Contract, Agri-Environmental Policy, Information asymmetry, Agricultural and Food Policy, Environmental Economics and Policy, Q15, Q18,

Agricultural water markets: exploring limits and opportunities in Italy and Spain

Agriculture is the main water-using sector in Southern European Countries, such as Spain and Italy. Innovative institutional solutions for reducing water use or increasing its efficiency are pursued by recent legislation concerning water, in particular by the Water Framework Directive (WFD). Even if not explicitly considered by the directive, water markets may be seen as a kind of instrument responding to the guiding principles of the upcoming water regulation. The issue of water markets is very much debated in the water economics literature and particularly in the agricultural water literature. Water markets refer to a mechanism of water allocation based on the exchange of rights on water use. Water markets are proposed and supported by economic theory on the ground that they produce an efficient allocation of water resources. Criticisms to water markets may derive both on the ground of economic efficiency itself (for example due to higher transaction costs and expenditure for wider water transport systems) and on equity considerations (for example the concentration of water on the more efficient farms that would specialise in intensive production, while the others would retain less intensive crops). The objective of this paper is to test to what extent water markets may contribute to the improvement of the efficiency of water use. The analysis is based on a linear programming model applied at basin level, comparing the situation with and without market and including transaction costs proportional to the amount of water exchanged. The model simulates the behaviour of different farm types, derived from cluster analysis on a sample of farms in each area. The model is tested in two areas in Southern Italy and Spain. The paper confirms that water markets have the possibility to improve water use efficiency. However, the exchanges are very much affected by the amount of transaction costs, even for transaction costs relatively low. In the case of Lower Ter, gross margin increase due to markets may be as high as 30% which is rather a considerable amount. Instead, the highest increase in Foggia is only about 10%, a result that may be regarded as hardly relevant. In Foggia the benefits of the water market collapse only when transaction costs are between 0,1 and 0,2 EUR/m3 (that may be regarded as a fairly high amount). On the contrary, Lower Ter is more sensitive to transaction costs and 0,075 EUR/m3 are enough to cause the market to shut down whatever the water quota. When potential improvements occur, an additional issue arises, i.e. the institutional acceptance of market criteria for water allocation purposes. The general attitude in Europe still appears against such a solution. However, the changing economic context (agricultural markets, demographic trends) tend to decrease rigidities about water exchange, particularly among farmers.Water, Irrigation, Agriculture, Water markets, Water policy, Mathematical programming

People, trade and training: the needs of Morocco agricultural enterprises facing EU markets

The Mediterranean area is the core of an increasing exchange of goods and people. A distinctive feature of present trends in international relationship is the importance of factors that are beyond the mere exchange of goods. In particular, foreign investment, the creation international enterprises and training and personal growth of actors that are involved in the production process are key elements of the present scenario. The objective of this paper is to discuss the need of education and training in Morocco agricultural and agri-food enterprises in view of the increasing connection with the EU economy. In particular, attention is focused on the need brought about by the increased product quality requirements and by the installment of EU and US enterprises in Morocco. The study is carried out as a preliminary activity of the TEMPUS project STRIDE 4, through a survey of about thirty Morocco enterprises. The preliminary results show a strong need for training and information. The questionnaire shows a high degree of awareness about gaps and problems in meeting EU consumer expectations. At the same time, most respondents already show a clear positive strategy toward meeting such needs and many enterprises in fact are already adequate to many quality requirements. The main focus of the training required is on the interface between technical and marketing activities. Continuous education and life long learning are also perceived as major needs. In the background, the research shows the need of a more consistent understanding of each others institutions and cultural settings, as well as of a long term process of learning through collaborative training, production and research.Agribusiness,

Accounting for multiple impacts of the Common agricultural policies in rural areas: an analysis using a Bayesian networks approach

In evaluating the potential effects of the reforms of the Common Agricultural Policy, a particularly challenging issue is the representation of the complexity of rural systems either in a static or dynamic framework. In this paper we use Bayesian networks, to the best knowledge of the authors, basically ignored by the literature on rural development. The objective of this paper is to discuss the potential use of Bayesian Networks tools to represent the multiple determinants and impacts of the Common Agricultural Policies in rural areas across Europe. The analysis shows the potential use of BNs in terms of representation of the multiple linkages between different components of rural areas and farming systems, though its use as a simulation tool still requires further improvements.Bayesian Networks (BNs), farm-household, multiple outcomes, Agricultural and Food Policy, Q1, Q18,

The potential impact of markets for irrigation water in Italy and Spain: a comparison of two study areas

The viability of irrigated systems in Southern Europe is closely linked to efficient institutional settings and water-allocation mechanisms. A significant, although not widely used, mechanism for water allocation is an intra-sectorial water market. The objective of this paper is to evaluate to what extent water markets may contribute to the improvement of the efficiency of water allocation and to the profitability of irrigated agriculture. The related issues of water allocation among farm types and farm specialisation are also addressed. The analysis is based on a basin-level linear programming model, comparing the situation with and without a market. It includes both fixed and variable transaction costs and estimates their combined effects on market performances. The model is applied in two areas in Southern Italy and Spain, and simulates the behaviour of different farm types, derived from cluster analysis on a sample of farms in each area. The paper confirms that water markets could potentially improve the economic efficiency of water use, in terms of higher profit per hectare, given limited water availability. The potential improvements are associated with a more intense specialisation of farms and are strongly differentiated among farmers, particularly where significant restrictions to water availability occur. This corroborates the expectations of institutional difficulties in implementing water markets. However, the exchanges, and consequently the potential effects of water markets, are heavily affected by the actual level of water availability, as well as the size and the structure (fixed vs. proportional) of transaction costs. The paper calls for a more in-depth analysis of the connections between market performances and institutional settings, as related to the issue of water-agriculture policy design and coordination.water trading, natural resource management, simulation, water management and policy, linear programming, irrigation, Resource /Energy Economics and Policy,

Contract Design and Targeting for the Production of Public Goods in Agriculture: The Impact of the 2003 Cap Reform

The objective of this paper is to compare different ways of designing agri-environmental contracts and to set targeting under adverse selection, comparing conditions before and after CAP reform 2003. The results suggest that the present contract structure may be relevantly improved through a more accurate design and a clearer target. The reform, through the decoupling mechanism, will contribute to reduce the opportunity cost of the adoption of agri-environmental measures. This may increase the optimal amount of public goods produced by agriculture and will encourage participation by farmers. However, in order to properly exploit the new conditions brought by the 2003 reform, it is necessary to review the way agri-environmental payments are assigned and their structure, in terms of targeting, contract differentiation and payment allocation.agri-environmental schemes, contracts, multifunctional agriculture, CAP reform, Agricultural and Food Policy, Environmental Economics and Policy, Q1, Q18, Q2,

The role of the Common Agricultural Policy in the spatial location of agricultural activities

The objective of this paper is to analyse and quantify the spatial dimension of the CAP effects in an area of Northern Italy. The analysis is based on survey information about stated intentions of farm-household in two CAP scenarios, treated through statistical analysis intended to identify the potential determinants of different farm reactions, focusing on explicit spatial variables (altitude, LFA, agrarian regions) among explanatory variables. Altogether, the study shows the relevance of explicitly addressing the spatial effects of policies and also the differentiated spatial effect of policy on different dimensions of agricultural activities. However, the work also highlights the limitation of the location-based representation of the spatial dimension compared with both non-spatial variables and more functional variables underlying the spatial dimension.Common Agricultural Policy, Spatial effects, Emilia-Romagna., Agribusiness, Agricultural and Food Policy, Community/Rural/Urban Development, Food Consumption/Nutrition/Food Safety, Labor and Human Capital,

CONSOLE_WP3_Task3.2_Pan-EU survey of farmers and other rural landowners_IT_UNIBO_2022.10.28_v02

The dataset contains the data collected through the Italian - Emilia-Romagna region - survey on farmers/ land managers/forests owners, carried out within the WP3 activities of the CONSOLE project for the purposes of the Choice Experiment exercise, related to the investigation of the innovative contract solutions under analysis for CONSOLE. The dataset contains 25 records observed with respect to 16 variables

Using the ecosystem services framework for policy impact analysis: An application to the assessment of the common agricultural policy 2014-2020 in the province of Ferrara (Italy)

The objective of this study is to test a methodology for the classification of areas according to the provision of ecosystem services and for the evaluation of the effects of different agricultural policy scenarios. The evaluation focuses on the different categories of Ecosystem Services (ES) and applies a set of indicators available from secondary data sources. Two scenarios were compared, represented by the pre-2014 CAP and the CAP 2014-2020, based on the measures of the RDP 2014-2020 focused on enhancing ecosystems. The approach was implemented under two weighting solutions. First, we assumed that all indicators have equal weight. As a further step, the framework was integrated with a weighting procedure in order to account for the different importance of the various ES indicators. All municipalities offer a significant number of provisioning and cultural services, mainly connected to recreational opportunities. The indicators with higher importance in the area represent provisioning, supporting and regulating services, while cultural services have received less attention. Comparing the results of the simulation of different policy scenarios, there are no significant differences since the CAP 2014-2020 does not provide for measures likely to affect substantially the overall production of ecosystem services. While this result is plausible, the study confirms the limitations of available secondary data in providing a full account of ecosystem services provision and of their variations as a result of policy