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53rd Congress of the European Regional Science Association: "Regional Integration: Europe, the Mediterranean and the World Economy", 27-31 August 2013, Palermo, Italy
Since introduction with accompanying measures of MacSharry Reform, Agri-Environmental Schemes (AESs) represents the main agricultural policy instrument which address environmental objectives in Common Agricultural Policy. In spite of twenty years application and its high share of RDP budget, several evaluation reports and scientific literature have measured a low environmental impacts compared with the expectations. Economic literature has identified in low target level of schemes, low participation rates, spatial distribution heterogeneity and asymmetric information between farmers and public administration the main reasons for such AESs lower impact. AESs are compensation payments, aimed to encourage farmers to adopt agricultural practices/prescriptions which affect positively environment. The agri-environmental payments are designed in order to cover (on the average) income foregone, and operational and transaction cost increase due to AESs farm implementation. Agricultural economic literature has highlighted positive effects of incentive mechanisms in increasing farmers? participation. Such literature has identified farm, farmers and household characteristics which determine an expected compliance cost lower than compensation payments, and then are determinant of participation. The agricultural economics literature has also highlighted how uncertainty in market and climatic condition is one of the main driver of adoption of AESs. Due to farmers? risk aversion, farmers prefer to receive lower but with certain payments (i.e. payments by landscape measure or twenty years set-aside) instead of uncertain income (even if is higher). A growing literature has investigated the role of transaction costs and social capital as determinants of AESs participation. Such literature branch has identified elements of trust and networking, as main motivational factors which affect AESs participation. The objective of the paper is to provide a comprehensive analysis of determinants of agri-environmental adoption. The objective is pursued combining results of farm level adoption analysis with spatial analysis of participation rate. The first analysis is undertaken applying farmers? behavior choice model, in order to identified the main farm, farmer and household (micro) characteristics which positively or negatively affect the probability to participate in Tuscany AESs. Data are obtained by Tuscany 2010 Census. The second model is undertaken applying spatial analysis (ESDA and spatial econometrics) in order to identifies alternative spatial patterns and to investigate meso determinants of participation to AESs. Data are obtained by ARTEA (regional RDP payments agency) and are referred to the entire RDP 2007-2013. Preliminary results shown that both micro and meso characteristics strongly affect participation to AESs. In fact, farm and household structure, quality of advice services and territory endogeneity, significantly affect AESs adoption. Altogether results allow to better understand the participation mechanism. Results will support an improvement of selection mechanism which is aimed to better target AESs measures.
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