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,

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,

Towards an economics of the bioeconomy: Four years later

This paper provides a summary of the evolution of the bioeconomy and compares it with trends in related economics literature. The objective is to discuss how the bio-based economics literature from recent years matches real world concerns and to emphasise emerging needs, in order to derive implications for economic research. Though \u2018bioeconomy economics and policy\u2019 is still far from being a well-established discipline, the current literature seems to recognise scope for its development together with (and contributing to) the development of the bioeconomy as a whole. Several emerging research areas are identified, ranging from the quantification of bioeconomy components and biomass flows, to the political economy of the bioeconomy. However, the economics of the bioeconomy needs most likely to develop not as an independent research area, but rather in close connection with the more \u2018traditional\u2019, but highly lively and innovating, areas of agriculture and food economics

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,