Unintended consequences of environmental policies: the case of set-aside and agricultural intensification

No 20-1066, TSE Working Papers from Toulouse School of Economics (TSE)

Abstract: Set-aside policies providing agronomic and ecological benefits have been mainstream practices in European agriculture. Because they may lead to intensification on cultivated land, they can however have mixed environmental effects. To evaluate the indirect impact of a set-aside policy on crop intensification, we consider two elasticity indicators with respect to set-aside subsidy: chemical input demand and intensity of input use. We estimate a structural, multi-output model on a panel of French farmers from 2006 to 2010, accounting for multivariate selection (corner solutions) on crops and land use, with a semi nonparametric Quasi-Maximum Likelihood estimator robust to deviations from normality and homoskedasticity. Results show that a set-aside subsidy can provide farmers with incentives to intensify their production, leading to potential adverse environmental effects that can however be offset by a complementary tax policy instrument.

Keywords: Set-aside; land use; fertilizer and pesticide input demand; corner solutions; semi nonparametric estimation. (search for similar items in EconPapers)
JEL-codes: C33 C34 Q12 (search for similar items in EconPapers)
Date: 2020-01
New Economics Papers: this item is included in nep-agr and nep-env
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.tse-fr.eu/sites/default/files/TSE/docu ... 2020/wp_tse_1066.pdf Full Text (application/pdf)

Related works:
Working Paper: Unintended Consequences of Environmental Policies: the Case of Set-aside and Agricultural Intensification (2022)
Working Paper: Unintended consequences of environmental policies: the case of set-aside and agricultural intensification (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:tse:wpaper:123955

Access Statistics for this paper

More papers in TSE Working Papers from Toulouse School of Economics (TSE) Contact information at EDIRC.
Bibliographic data for series maintained by ().