Agri-environmental schemes in the European Union: the role of ex ante costs

The purpose of this paper is to analyse land allocation between competing agri-environmental contracts taking into account institutional issues and farm household and farm characteristics. We consider a Biodiversity Protection Contract, Landscape Management Contract and a Restriction on Intensive Practises Contract. The paper shows that it is important to study the choice for an agrienvironmental contract in combination with the choice for other agri-environmental contracts. The reasons being that a unit of land can only be allocated to one contract (although a farm can select more than one contract) and perceived relative marginal costs of contracts can change if institutional settings and farm household and farm characteristics alter. The model uses a two stage method. In the first step the probability of contract choice is determined. In the second stage these probabilities are linked to ex ante costs (including transaction costs) and optimal contract choice is determined.Agri-environmental contracts, transaction costs, contract choice, Agricultural and Food Policy, Environmental Economics and Policy, Land Economics/Use,

The Role of Transaction Costs and Bargaining Power in Wildlife and Landscape Services Production: A Micro-Econometric Model for Dutch Dairy Farms

In this paper a theoretical and empirical model is developed for analysing the decisions of individual farmers whether or not to produce wildlife and landscape services, how much of these services to produce and form an environmental co-operative in order to reduce transaction costs or to build up bargaining power. The model is applied for Dutch dairy farmers as the main users of agricultural land in the Netherlands. Simulations show that the reduction of transaction costs makes it attractive for farmers to form an environmental cooperative in case of a fixed price for wildlife and landscape services. Therefore more wildlife and landscape services are produced and more farmers are involved compared to a situation with individual supply. If demand is no longer perfectly elastic an increase in wildlife and landscape services production leads to lower prices offsetting part of the production and profit increase caused by lower transaction costs. However, if the environmental co-operative acts like a monopolist its bargaining position leads to a decrease in the production of wildlife and landscape services and higher prices.wildlife and landscape management, micro-econometrics, transaction costs, co-operation, Livestock Production/Industries,

Forest and landed real estate owners; suppliers of rural amenities and agricultural land

Land-use in rural areas may be reallocated between farmland and forest and nature areas. This paper addresses reasons for forest and landed estate owners to own their property and motivations for different activities of forest and real estate owners, including leasing out land to farmers. In 2006 we carried a survey among 171 forest and landed estates owners in the Eastern part of the Netherlands (response rate of 44%). Preserving family property, preserving nature and landscape, and hobby or spending free time are ranked as important reasons for having a forestry enterprise or a landed estate. Most of the owners can be characterised as multifunctional. They often fulfil a combination of wood production, preservation of nature and landscape, providing facilities for tourism and hunting, leasing out of land and agriculture. Based on results of regression analysis we can conclude that not every forest and landed estate owner prefers multifunctionality in a similar way. Leasing out land to farmers is one of activities where income is an important reason.Landownership, multifunctionality, forest and landed estate owners, Land Economics/Use,

Plant Species Protection Contracts: Modelling Contract Choice for Specialised Dairy Farms and Mixed Dairy Pig Fattening Farms in the Netherlands

Proposals of the European Commission stress the future importance of agri-environmental payments within the rural development policy of the European Union. The aim of this paper is to present and discuss a model for choice for plant species protection contracts in the Netherlands. The model includes transaction costs, time and the possibility of lock-in situations related to contract choice. The approach discussed is flexible because it makes it possible to introduce all kinds of technical and institutional restrictions (differences in contract design).agri-environmental contracts, contract choice, Environmental Economics and Policy, C61, L14, Q12, Q24,

Structural change in the EU dairy sector

The aim of this paper to determine how structure and governance in the dairy sector in four different regions in the European Union alter as a result of the change in EU’s dairy policy. For this purpose two models of structural change are developed and interviews are held. Results differ between the regions depending on whether or not they are export oriented, their growth in farm size and farm exit rates.structural change, dairy policy, governance, Agricultural and Food Policy, Farm Management, Land Economics/Use,

Resilience of European farms under different CAP scenarios

The upcoming reform of the Common Agricultural Policy will put pressure on agricultural incomes and will cause more price volatility and income risk for farms in the EU. This raises the question if and how farms will survive these disturbances. Farms are able to survive only if they respond appropriately to disturbances. This resilience of farms is explained in this research by analysing the number of strategies that farmers indicate that they will use in a situation where the current CAP will continue and in a situation where it will disappear. The outcomes show that under both scenarios large more specialised farms with young farm heads are most resilient, and small more diversified farms headed by old farmers are least resilient. Results also show that farms that indicate to exit are the ones that are most dependent on CAP support, have old farm heads, and are part-time and diversified farms.resilience, governance, CAP reform, count model, Agricultural and Food Policy, Farm Management,

Explaining the Changing Institutional Organisation of Dutch Farms: The Role of Farmer's Attitude, Advisory Network and Structural Factors

Although the family farm remains the dominant organisational form for farms there are changes in the legal mode of organisation. Applying the new institutional economics and economic organisation theory the different organisation modes are explained, mainly in terms of control and income rights. Important factors are (limited) liability, risk-bearing costs, transaction costs, and residual control and income rights. In an empirical follow-up, based on a sample among 3100 farmers in the Netherlands, the impact of farmers' attitudes, farm advisory network, and structural variables on organisation choice are analysed. Especially the financial advisors appear to play a significant role in the choice of organisation mode. Other factors are age, branche (horticulture, factory farming), and farm size.farm organisation, ownership and management, liability, risk, residual control and income rights, attitudes, advisory network, Farm Management, Industrial Organization, Q12,

Why Are Farmers Going Multifunctional?

The European farm model is aimed at stimulating and facilitating multifunctional agriculture. This paper presents the results of research into the factors determining the adoption of multifunctional activities. In the paper survey results from 495 farms, spread all over the Netherlands, were used. Binomial logit models were estimated for multifunctional activities in general and four specific activities. Trust in the government is an important explaining factor for participation in nature conservation and recreation, however, less important for services and selling products. Location of the farm is important for nature conservation, services, and recreation. Attitude variables are particularly important for participation in nature conservation and day and stay recreation.multifunctionality, land use, agricultural policy, Agricultural and Food Policy, Land Economics/Use, G18,

COST-BENEFIT ANALYSIS OF THE DUTCH NATURE CONSERVATION POLICY: DIRECT, INDIRECT EFFECTS AND TRANSACTION COSTS OF THE ECOLOGICAL MAIN STRUCTURE IN THE NETHERLANDS

The scattering of nature areas in the Netherlands and the increased demand for nature lead to a governmental project in 1990 to complete a network of nature favouring areas, the ecological main structure, in 2018. The financial and economic costs and benefits of this project were analysed. Targets for purchasing of agricultural land and conversion into nature were adjusted several times as the land price doubled between 1995 and 2000. The purchasing rate still has to double, which will probably drive up the land price even further. The alternative is long-term contracts with farmers or private landowners for nature conservation.cost-benefit analysis, transaction costs, land market, Resource /Energy Economics and Policy,

Resilience of European farms under different CAP scenarios

The upcoming reform of the Common Agricultural Policy will put pressure on agricultural incomes and will cause more price volatility and income risk for farms in the EU. This raises the question if and how farms will survive these disturbances. Farms are able to survive only if they respond appropriately to disturbances. This resilience of farms is explained in this research by analysing the number of strategies that farmers indicate that they will use in a situation where the current CAP will continue and in a situation where it will disappear. The outcomes show that under both scenarios large more specialised farms with young farm heads are most resilient, and small more diversified farms headed by old farmers are least resilient. Results also show that farms that indicate to exit are the ones that are most dependent on CAP support, have old farm heads, and are part-time and diversified farms.resilience, governance, CAP reform, count model, Agricultural and Food Policy, Farm Management,