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Abstract
This paper evaluates the production and income effects from the adoption
of one popular agro-environmental measure, which concerns buffer strips along field
edges, on a representative sample of crop farms in Belgium taken from the Farm
Accountancy Data Network database. We represent the economic behaviour of each crop
farm with a profit-maximisation programming model that embeds an estimated ex-ante
flexible cost function. We calibrate the simulation model using the Positive Mathematical
Programming approach. Accounting for farm and regional heterogeneity, simulation
results show how crop farms may respond differently to incentives for the agroenvironmental
measure. Results demonstrate that economic incentives can be an effective
mechanism for encouraging uptake of agro-environmental measures and that impacts of
agro-environmental measures can vary by farm and region, depending on agronomic
conditions and the environmental potential for agro-environmental measure activity.