Set-Aside versus Quotas in Contracts for Agro-Environmental Regulation

In this paper, we analyze the simultaneous regulation of several goods produced on agricultural land such as environmental amenities and crops. This analysis is conducted using a general two goods model where all agricultural land is used for production. The regulation authority can regulate these goods either through set aside requirements or production quotas. The paper focuses on information asymmetry about some farm performance index creating adverse selection. When public funds are non costly we show that the net social welfare induced by the two types of contracts are equal. In general we also show that if the goal of the regulation is to decrease the production of the quota good it is better to use the quota contract. On contrary if the regulation aims at increasing the production of the quota good, it is better to use a set aside contract.Political Economy,

Découplage des aides, revenus et facteurs de production

La Politique agricole commune est engagée dans un processus continu de réforme dont le découplage des aides proposé par l’accord de Luxembourg constitue une étape importante. S’appuyant sur des travaux de modélisation, le programme GENEDEC contribue aux évaluations des impacts de la réforme en ce qui concerne les marges brutes, l’allocation des terres, les coûts d’opportunité des facteurs, et quelques critères environnementaux. Ce document restitue une partie des résultats obtenus à l’aide du modèle AROPAj de l’Unité mixte de recherche « Economie Publique » de Grignon.

Impacts of Promoting Perennial Crops in the French Agriculture

This paper is devoted to a quantitative analysis of the introduction of perennial crop in a short-term supply model. The analysis provides assessment of impacts regarding land use and N-input demand. We show that a variation in yield or the subsidy amount of miscanthus leads to a significant change in land use and N-input.lignocellulosic perennial crop, bio-energy, mathematical linear programming, land use, N-input demand, Crop Production/Industries, Marketing,

Greenhouse gas emissions from agriculture in the EU: A spatial assessment of sources and abatement costs

Agriculture contributes significantly to the emissions of greenhouse gases in the EU. By using a farm-type, linear-programming based model of the European agricultural supply, we first assess the initial levels of methane and nitrous oxide emissions at the regional level in the EU. For a range of CO2 prices, we assess the potential abatement that can be achieved through an IPCC-based emission tax in EU agriculture, as well as the resulting optimal mix of emission sources in the total abatement. Further, we show that the spatial variability of the abatement actually achieved at a given carbon price is large, indicating that abatement cost heterogeneity is a fundamental feature in the design of a mitigation policy. We assess the efficiency loss associated with uniform standards relative to an emission tax.Climate change, greenhouse gas emissions, agriculture, methane, nitrous oxide, European Union, marginal abatement costs, Environmental Economics and Policy, Q25, Q15,

Managing a Common Renewable Resource in Asymmetric Information

The clear definition of property rights is not a sufficient condition to prevent congestion effects in commons. In this paper we present how interesting can be the coordination among owners in the preservation of the common good. Our approach takes into account economic dynamics and incentive mechanisms in a hidden information context. We consider a natural resource which is being used up for a continuum of producers on a common property regime. We also consider that each producer has an individual performance index which is a hidden information of the rest of players. We introduce coordination in the sense of a global maximization of the joint profit. If there is no coordination among the producers, their behavior leads to complete rent dissipation. We focus our model in the case of the producers convinced to coordinate their actions in order to preserve their own economic sustainability. Under perfect information we find that the exclusion of at subset of producers can appear and how it is endogenously determined. Under asymmetric information we propose a quantity-transfer contract which lead us to the previous stationary disposal stock of the resource without exclusion.Commons, Natural Resources, Dynamics, Asymmetric Information, Contracts, Environmental Economics and Policy,

Évaluation et régulation de l’effet de serre d’origine agricole

Nous examinons la contribution du secteur agricole aux émissions de gaz à effet de serre ainsi que l’impact de mesures de régulation. À partir d’un modèle économique de l’offre agricole française à fort contenu technique, nous mesurons la contribution des activités animales et végétales à l’accumulation de méthane et de protoxyde d’azote et au stockage du carbone dans le sol et la partie aérienne des plantes. Nous donnons ensuite un éclairage prospectif sur la réaction à court et moyen terme de l’offre agricole à l’application de différents schémas de taxation. Dans un premier temps, nous donnons une appréciation de l’impact d’un schéma de premier rang et discutons de l’intérêt d’une incitation au reboisement des terres en jachère. Basées sur les données techniques disponibles, les taxes et primes reposent directement sur les niveaux d’émissions que l’agence environnementale est supposée mesurer parfaitement. Dans une optique de second rang fondée sur la taxation de facteurs observables à moindre coût, nous examinons ensuite l’effet : (i) d’une taxe sur l’alimentation achetée et (ii) d’une taxe sur l’animal. Le principal résultat est que l’incitation au reboisement constitue un instrument efficace de régulation de l’effet de serre d’origine agricole, alors que les schémas de taxe de second rang sur l’activité de production animale apparaissent relativement inefficaces.The aim of this paper is to study the modification of the greenhouse gas concentration in the atmosphere due to agricultural activities, and the impact of the implementation of regulation policy tools. From a supply-side model of the French agriculture, we estimate the contribution of cultivation and animal husbandry in terms of methane and nitrous oxide, taking also into account carbon storage in soils and plants. We then compare the effects of different tax schemes on agricultural supply in the short and mid run. We first focus on first best schemes. In this case, the taxes and subsidies are directly based on net emission levels that are assumed to be perfectly observed by the environmental agency. In this framework, we particularly discuss the opportunity of an incentive scheme proposed to producers in order to reafforest on set-aside land. Then we turn to the case of second best regulation tools based on the taxation of factors which are observable at lower cost, that is to say taxes on market feed and livestock. The incentive to reafforestation appears to be an effective means to regulate agricultural greenhouse gas emissions. It is much more socially acceptable than second best policy tools including taxes on activities derived from livestock

Retrait des terres et subsidiarité dans le cadre de la Politique Agricole Commune

Ce papier aborde la question de la subsidiarité dans le cadre de la Politique Agricole Commune. L'instrument privilégié est ici un contrat de gel de terre dont la définition relève soit directement des instances de l'Union Européenne, soit des instances nationales. Dans ce dernier cas, dit de subsidiarité, le budget public associé aux contrats est supporté par les budgets nationaux. Les contrats sont déterminés dans les deux types d'intervention publique, nationale et européenne. Dans le cas d'une politique de subsidiarité, les contrats nationaux sont définis par un équilibre de Nash résultant d'un jeu intra-européen. On ne peut déterminer analytiquement la politique qui domine l'autre en terme de welfare, sauf dans le cas très particulier d'Etats « identiques ». Dans ce cas, la politique commune domine la politique de subsidiarité. Toutefois le cadre théorique élaboré est propice à l'analyse empirique. Pour illustrer cette démarche, une analyse quantitative est proposée pour le secteur du blé tendre dans l'Union Européenne à 12 selon des données de 1994. Elle permet la comparaison des gains pour les producteurs, les consommateurs, et les contribuables des 12 pays dans les 3 situations offertes successivement par l'état de référence, la politique commune de gel de terre et la politique de subsidiarité.Théorie des contrats, gel de terres, asymétries d’information

Short-term Farm Level Adaptations of EU15 Agricultural Supply to Climate Change

Assessing climate change impact on agriculture is a complex task involving a wide range of economical and physical processes, leading to significant uncertainties. At European scale, climate change impacts on agricultural supply have been appraised to be of relatively less important driver by the end of century compared to other global drivers. However these diagnoses are incomplete due to a limited representation of both spatial heterogeneity in important determinants of agricultural supply (soil, management practices and producer typology) and fine scale processes such as farm scale autonomous adaptation. We propose a complementary approach based on a modeling framework including a spatially explicit representation of productivity and producer behavior with regard to heterogeneity in soil, climate, and producer socio-economic context to appraise climate change impacts including autonomous farm-scale adaptations of EU15 agricultural supply to climate change. Our results suggest that without accounting for autonomous adaptation European agricultural supply may have interesting resilience properties at an aggregated scale despite significant heterogeneity at smaller resolution. Accounting for autonomous adaptations result in significant yield gains, and may lead to (i) a significant increase in the relative profitability of crops compared to other land-covers, thus possibly increasing its agricultural land-use share over other land covers, and (ii) an increase in total European production which may have impacts on agricultural goods markets, thus highlighting the need for integrating fine scale processes such as autonomous adaptation.Environmental Economics and Policy, Farm Management,

Évaluation et régulation de l’effet de serre d’origine agricole

The aim of this paper is to study the modification of the greenhouse gas concentration in the atmosphere due to agricultural activities, and the impact of the implementation of regulation policy tools. From a supply-side model of the French agriculture, we estimate the contribution of cultivation and animal husbandry in terms of methane and nitrous oxide, taking also into account carbon storage in soils and plants. We then compare the effects of different tax schemes on agricultural supply in the short and mid run. We first focus on first best schemes. In this case, the taxes and subsidies are directly based on net emission levels that are assumed to be perfectly observed by the environmental agency. In this framework, we particularly discuss the opportunity of an incentive scheme proposed to producers in order to reafforest on set-aside land. Then we turn to the case of second best regulation tools based on the taxation of factors which are observable at lower cost, that is to say taxes on market feed and livestock. The incentive to reafforestation appears to be an effective means to regulate agricultural greenhouse gas emissions. It is much more socially acceptable than second best policy tools including taxes on activities derived from livestock. Nous examinons la contribution du secteur agricole aux émissions de gaz à effet de serre ainsi que l’impact de mesures de régulation. À partir d’un modèle économique de l’offre agricole française à fort contenu technique, nous mesurons la contribution des activités animales et végétales à l’accumulation de méthane et de protoxyde d’azote et au stockage du carbone dans le sol et la partie aérienne des plantes. Nous donnons ensuite un éclairage prospectif sur la réaction à court et moyen terme de l’offre agricole à l’application de différents schémas de taxation. Dans un premier temps, nous donnons une appréciation de l’impact d’un schéma de premier rang et discutons de l’intérêt d’une incitation au reboisement des terres en jachère. Basées sur les données techniques disponibles, les taxes et primes reposent directement sur les niveaux d’émissions que l’agence environnementale est supposée mesurer parfaitement. Dans une optique de second rang fondée sur la taxation de facteurs observables à moindre coût, nous examinons ensuite l’effet : (i) d’une taxe sur l’alimentation achetée et (ii) d’une taxe sur l’animal. Le principal résultat est que l’incitation au reboisement constitue un instrument efficace de régulation de l’effet de serre d’origine agricole, alors que les schémas de taxe de second rang sur l’activité de production animale apparaissent relativement inefficaces.

Limiting the Nitrogen Losses by N-tax and Bioenergy Support: A Quantitative Analysis of Environmental Policy Mix Impacts in the North of France

This paper is devoted to assessment of policy mix impacts regarding nitrogen pollutants. The analysed policy combines a tax on the nitrogen input and incentives promoting perennial crops assumed to be low input ones. We show that perennial crop subsidy increases significantly the tax efficiency, compatible with the balanced budget of the Regulatory Agency in charge of the environment. Based on a MILP agricultural supply model, quantitative analysis provides assessment of impacts regarding land use, farmers income, and N losses at the North France level.Bio-economic model, mathematical linear programming, environmental policy mix, N-fertilizer tax, bio-energy support, Environmental Economics and Policy,