Contract design in agri-environmental schemes with fixed private transaction costs and countervailing incentives

The aim of this paper is to test the relevance of considering private fixed transaction costs for contract design of Agri-Environmental Schemes, when transaction costs are negatively correlated to marginal compliance costs. In order to do so, a principal-agent model of contract design under adverse selection, including fixed private transaction costs, is developed. The model is applied to the design of payments in the Emilia Romagna region of Italy. The results show that fixed transaction costs in the range of those actually faced by farmers may significantly affect the optimal amount of environmental good to be produced by each farm type. In some cases, fixed transaction costs can even reverse the standard insight that more of a public good should be produced when the cost of its provision is lower (countervailing incentives). The results call for a higher attention to private transaction costs in the design of agri-environmental contracts.Agri-environmental schemes, principal-agent, countervailing incentives, Environmental Economics and Policy,

Small eigenvalues of random 3-manifolds

We show that for every $g\geq 2$ there exists a number $c(g)>0$ such that the smallest positive eigenvalue of a random closed 3-manifold $M$ of Heegaard genus $g$ is at most $c(g)/{\rm vol}(M)^2$.Comment: 52 pages. Major revisio

Factors Affecting the Impact of CAP Scenarios on Farm Structure: An Analysis Based on Stated Intentions

Several authors have emphasised the effect of agricultural policy (such as SFP) as a driver of structural change. This paper aims to identify the determinants of the change in the use of productive factors under different policy scenarios. The analysis is performed ex ante, assessing the effect of CAP abolishment (as compared to the current CAP) on the use of productive factors, based on stated intentions by farmers. The results highlight the role of farm size, intensity and education in determining different patterns of reaction to policy changes. Also differences are identified among the three main component of structural change, land, capital and labour, with the latter being the less dependent upon the CAP.structural changes, CAP, stated intentions, multinomial logit, Agricultural and Food Policy, Farm Management,

Employment, Technology and Institutions in the Process of Structural Change. A History of Economic Thought Perspective

The present issue of the Working Papers series of the Dipartimento di Economia Politica at Milano- Bicocca reproduces the contributions presented at the mid-year ESHET Conference which took place at the Universities of Pavia and Milano-Bicocca on 16 and 17 November 2001. The program was arranged jointly by Gianni Vaggi and Pier Luigi Porta and the Conference was jointly organised by ESHET with the Department of Political Economy and Quantitative Methods of the University of Pavia and the Department of Political Economy of the University of Milano-Bicocca. The idea around which the Conference was built referred basically to Luigi Pasinetti’s conception of structural change and structural dynamics in a history-of-thought perspective. Luigi Pasinetti, Eshet’s first President, opened the Conference at the University of Pavia. The program included two sessions taking half a day each: the opening session was in Pavia on 16 November 2001 and the final session in Milan the 17 November. Luigi Pasinetti chaired the session held at the University of Pavia and Andrew Skinner was the chairman in Milan.

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,

Assessing the effect of the CAP on farm innovation adoption. An analysis in two French regions

Literature on innovation adoption mechanism has emphasised the positive effect of Single Farm Payments (SFP) and Rural Development Payments on adoption of new technologies. In this context, the expected process of CAP reforming after 2013 is likely to strengthen the role of innovation in the European Union (EU). The objective of this paper is to identify the determinants of the adoption of future innovation, in particular in connection to past innovation, and to assess the role of agricultural policy in the promotion of innovation adoption. The analysis is applied to two regions (Centre and Midi-Pyrénées) in France. Two separate Count models are developed in order to explain famers’ stated intention concerning different intensities of innovation adoption under two different policy scenarios. Preliminary results highlight that the CAP strongly affects the decision to innovate and the innovation intensity, even if there is no statistical significance for the variable connected to the amount of payments or the level of payment per hectare.innovation, sequences of innovation, CAP, zero inflated Poisson model, Agricultural and Food Policy, Q12, Q18,

Real option models for simulating digester system adoption on livestock farms in Emilia-Romagna

Innovation and new technology adoption represent two central elements for the enterprise and industry development process in agriculture. The objective of this paper is to develop a farm-household model able to simulate the impacts of uncertainty in SFP, the selling price of energy and agricultural product prices parameters on the adoption of methane digester for biogas production. The model implemented is based on a real option approach that includes investment irreversibility and stochasticity in relevant parameters. The results show the relevance of uncertainty in determining the timing of adoption and emphasise the importance of predictability as a major component of policy design.real options, methane digester, biogas, investment, uncertainty, Agricultural and Food Policy, Farm Management, Land Economics/Use,

A comparative cost-effectiveness analysis of biodiversity indicators in grassland farming systems

Farm Management, Resource /Energy Economics and Policy,

EX-ANTE EVALUATION OF AGRI-ENVIRONMENTAL SCHEMES: COMBINING ELEMENTS OF PRIVATE AND PUBLIC DECISION MAKING

The objective of this paper is to set a complete ex-ante evaluation to support Decision Makers in designing more efficient and effective agri-environmental contracts, through an integrated modelling of elements of private and public decision making. Ex-ante comparison of policy design options in terms of overall effectiveness requires both simulations of farmers' behaviour and evaluation of the farms simulations outcomes. An intermediate step is the aggregation of single farms impacts at territorial level, in order to identify the aggregate impact of each alternative. Alternatives are several contract design, based on different levels of payments. Farm level analysis is based on a real options approach including in the simulations the timing of choice and the uncertainty in the future about price and decoupled payments. Aggregate policy impact is identified through the quantification of economic, social and environmental impacts at territorial level and the weights are elicited with Multiple-Criteria Robust Interactive Decision Analysis (MCRID). Simulations in the case study show that relevant opportunities to improve policy design are available. Multicriteria Analysis is then used to aggregate impacts of many criteria, including not only effects on the environment, but also economic and social impacts.Agri-environmental schemes, Real Options, Investments, Decoupled payments, Uncertainty, Agricultural and Food Policy, Environmental Economics and Policy, Risk and Uncertainty,