Article ID Journal Published Year Pages File Type
5055976 Economic Modelling 2007 17 Pages PDF
Abstract

Environmental externalities in agriculture, and the choice of suitable instruments to integrate environmental concerns into agricultural policies, are a matter of interest for the Common Agricultural Policy. In this paper, we use Data Envelopment Analysis techniques to assess the impact on farms' performance of two environmentally-friendly regulations aimed at abating consumption of inorganic nitrogen in Spanish citrus farming: levies on purchased nitrogen and nitrogen use permits for farms. By comparing farms' short-run maximum profits under both unregulated and regulated scenarios a regulation cost index is computed. Our results show that nitrogen overuse is mostly a matter of management inefficiency and that pollution could be reduced by promoting best farming techniques. Instead, if environmental regulations are implemented, regulating authorities should be aware that quantitative limits exercise a lower impact on farms' profits than taxes.

Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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