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Abstract
This paper explores farmers’ prospective responses to the “greening” of the Common
Agricultural Policy. The analysis is based on discrete choice experiments with 128 German
farmers. Participants were asked to choose between a “greening” option with a given set of
management prescriptions and an “opt-out” alternative with a stipulated cut of the single
direct payment. A binary logit model is used to identify the variables affecting the likelihood
of “greening” being chosen. In addition, latent class estimations are carried out to group
respondents into latent classes of “compliers” and “non-compliers”. We find that farmers”
choices are driven by “greening” policy attributes, personal and farm characteristics, and
interactions between these two groups of variables. Farmers perceive “greening” as a costly
constraint, but not all farmers are equally affected and not all “greening” provisions are
regarded as equally demanding. Specialised arable farms on highly productive land and
intensive dairy farms are most likely to opt out of “greening” and voluntarily forgo part of
their single payment entitlements. The paper concludes with a set of recommendations for
improving the design of a second-best policy.