Delivering public goods in agriculture: the cost of green payments for Italian farms

The recent CAP reform proposes a green component of the first pillar of the CAP that remunerates farmers for the provision of environmental public goods, by conditioning the 30% of direct payments to specific requirements. The paper focuses on two of the greening obligations of the reform proposal: the diversification of crops and the establishment of the ecological focus areas. The paper, through FADN data, aims at quantifying the impact of these measures on the gross margin (GM) of farms specialized in arable crops in Italy. The results show different impacts of the green payments on arable crops in Italy according to the characteristics of farms, their location and their economic and physical size, showing data the greening is an “horizontal measure” that does not take into adequate account the specific conditions where farmers operate and the different costs of providing public goods through agriculture.

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Conference Paper/ Presentation
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JEL Codes:
Q15; Q18

 Record created 2017-04-01, last modified 2018-01-22

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