Increasing the cost-effectiveness of EU agri-environment policy measures through evaluation of farm and field-level environmental and economic performance

• Without EU support differences between organic and conventional performances increase.
• Income foregone by conventional farmers to produce benefits like organic farmers was 210 Euros/ha.
• Changing current payments based on performances and efficiency would lead to improvement of organic farming.

A lot of attention in the debate on the 2014–2020 programming period of the EU CAP and rural development policy revolves around the policy's contribution to enhancing resource use efficiency, decreasing environmental impact, restoring ecosystems and how to ensure more efficient and effective agri-environmental measures (AEMs). Nevertheless, studies that simultaneously address multiple measures with multiple environmental objectives and targets are underrepresented in the scientific literature. The objectives of the present article are (i) to present an integrated tool-kit for AEM design resulting from the combination of farm modelling with the Sustainable Value Approach (SVA), and (ii) to evaluate the potential of the tool-kit to support AEM design through an application to estimate cost-effective organic agriculture payments for the dairy sector in Mugello, northern Tuscany. Sustainability assessment of organic and conventional farming systems (OFS and CFS, respectively) under the 2007–2013 EU CAP support schemes and a no EU support scenario show better OFS performances regarding nitrogen leaching (−52% and −47% under the current CAP and the no EU support scenarios, respectively), soil erosion (−24% and −34%), potential pesticide risks (−100%), biodiversity (+13% and +30%). Income foregone for the production of environmental benefits from organic agriculture under a no EU support scenario is equal to 210 Euro/ha. Sustainable value calculations combined with modelling results indicate soil erosion and nitrogen leaching as the environmental processes to be addressed with specific policy measures to further increase the efficiency of organic farming. A new organic agriculture support scheme designed based on such indications further increases the OFS SV and almost closes the GAP with a benchmark farm of the area, featured with ideal performances in terms of environmental and economic indicators. The payment scheme we designed with the support of the integrated tool-kit shows to be more cost-effective and efficient of current AEMs.