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Abstract
Agri-environmental schemes (AES) have been studied under different perspectives in
Europe, since the beginning of the ‘90s. Under regulation 1698/2005, agri-environmental
schemes design has been modified with a more clear identification of a baseline for
identifying the commitments and the costs of these prescriptions.
The link between cross-compliance and agri-environmental schemes can be
interpreted as a problem of joint design by the decision maker. From the farmer’s point of
view, private costs of participations in agri-environmental schemes shall be added to the cost
to be compliant with the mandatory standard defined for each measure if they are not already
implemented. This amount of costs arise when mandatory standard are required in the whole
farm, even if agri-environmental schemes are applied in a small portion of the farm.
The objectives of this paper is to investigate the farmer choice under different amounts
of control and sanctions about the application to mandatory standards and about the
commitments required by agri-environmental schemes, in conditions of moral hazard. A case
study in an area of Emilia Romagna (Italy) has been developed. The simulations are referred
to an agri-environmental scheme relative to input reductions use. The model offers useful
insights about the mechanisms of compliance in agri-environmental schemes and their
implications for the effects of policies in the case study area.