In the CAP reform 2014–2020, the ‘green’ component of direct payments remunerates environmental services and includes three greening requirements: crop diversification, maintenance of permanent grassland and establishment of an ecological focus area (EFA). This paper evaluates the effect of ‘greening’ and payment redistribution on farm incomes and land use, considering two different hypotheses of the EFA weighting factor (Ewf) for nitrogen-fixing crops. The evaluation is developed at farm level by a positive mathematical programming (PMP) model and applied to more than 2,000 farms in northern Italy. The results show that crop diversification will mainly affect the cereal area, with significant reductions in maize and wheat, while the EFA requirement, especially with the lower Ewf, will boost the spread of protein crops. Nevertheless, ‘greening’ does not significantly affect farm income, while greater economic effects are mainly due to the redistribution of direct payments.
ArfiniF.DonatiM. (2013), ‘Organic production and the capacity to respond to market signals and policies: An empirical analysis of a sample of FADN farms’, Agroecology and Sustainable Food Systems, Vol 37, No 2, pp 149–171.
2.
Council of the EU (1991), Council Directive 91/676/EEC of 12 December 1991 Concerning the Protection of Waters against Pollution Caused by Nitrates from Agricultural Sources as Amended by Regulations 1882/2003/EC and 1137/2008/EC, EU, Brussels.
3.
Council of the EU (2009a), Regulation (EC) No 1217/2009 of 30 November 2009 Setting up a Network for the Collection of Accountancy Data on the Incomes and Business Operation of Agricultural Holdings in the European Community, EU, Brussels.
4.
Council of the EU (2009b), Regulation (EC) No 73/2009 of 19 January 2009 Establishing Common Rules for Direct Support Schemes for Farmers under the Common Agricultural Policy and Establishing Certain Support Schemes for Farmers, Amending Regulations (EC) No 1290/2005, (EC) No 247/2006, (EC) No 378/2007 and Repealing Regulation (EC) No 1782/2003, consolidated version, EU, Brussels.
5.
Council of the EU (2013), ‘Amendments on proposal for a regulation of the European Parliament and of the Council establishing rules for direct payments to farmers under support schemes within the framework of the Common Agricultural Policy (CAP Reform) – Presidency consolidated draft Regulation (7183/13)’, EU, Brussels.
6.
DonatiM.ArfiniF. (2013), ‘Application of the PMP model to estimate specific cost in Italy’, in CesaroL.MarongiuS., eds, The Use of RICA to Estimate the Cost of Production in Agriculture Application of Econometric and Mathematical Programming Methodologies, INEA, Rome.
7.
European Commission (2010), Environmental Impact of Crop Rotations in the EU, Final Report, 6 September 2010, EC, Brussels.
8.
European Commission (2011), Proposal for a Regulation of the European Parliament and of the Council Establishing Rules for Direct Payments to Farmers under Support Schemes within the Framework of the Common Agricultural Policy, COM(2011) 625 final/2 2011/0280 (COD), 19 October, EC, Brussels.
9.
European Commission (2014a), ‘Delegated acts on the CAP Reform – an explanation of the main elements’, MEMO/14/180, 11 March, EC, Brussels.
European Commission (2014c), Commission Delegated Regulation (EU) and Annexes, Supplementing Regulation (EU) No 1307/2013 of the European Parliament and of the Council Establishing Rules for Direct Payments to Farmers under Support Schemes within the Framework of the Common Agricultural Policy and Amending Annex X to that Regulation, EC, Brussels.
European Parliament (2013), Proposal for Negotiating Mandate on the Proposal for a Regulation of the European Parliament and of the Council Establishing Rules for Direct Payments to Farmers under Support Schemes within the Framework of the Common Agricultural Policy (COM(2011)0625 - C7-0336/2011 - COM(2012)0552 - C7-0311/2012 – 2011/0280(COD) – 2013/2528(RSP)), European Parliament, Brussels.
14.
European Parliament and Council of the EU (2000), Directive 2000/60/EC of the European Parliament and of the Council of 23 October 2000 Establishing a Framework for Community Action in the Field of Water Policy, European Parliament and Council of the EU, Brussels.
15.
European Parliament and Council of the EU (2013), Regulation (EU) No 1307/2013 Establishing Rules for Direct Payments to Farmers under Support Schemes within the Framework of the Common Agricultural Policy and Repealing Council Regulation (EC) No 637/2008 and Council Regulation (EC) No 73/2009, European Parliament and Council of the EU, Brussels.
16.
HartK.LittleJ. (2012), ‘Environmental approach of the CAP legislative proposal’, International Agricultural Policy, Vol 1, pp 19–30.
17.
MatthewsA. (2012), Environmental Public Goods in the New CAP: Impact of Greening Proposals and Possible Alternatives, Directorate General for Internal Policies Policy Department B: Structural and Cohesion Policies, Agriculture and Rural Development, European Parliament, Brussels.
ParisQ. (1997), ‘A PMP update and extension’, paper presented at the Capri Workshop, Reggio Emilia, Italy.
20.
ParisQ.ArfiniF. (2000), ‘Funzioni di costo di frontiera, auto-selezione, rischio di prezzo, Pmp e Agenda 2000’, Rivista di Economia Agraria, Vol 55, No 2, pp 211–242.
21.
ParisQ.HowittR.E. (1998), ‘An analysis of ill-posed production problems using maximum entropy’, American Journal of Agricultural Economics, Vol 80, pp 124–138.
22.
SolazzoR.DonatiM.ArfiniF.PetriccioneG. (2014), ‘A PMP model for the impact assessment of the Common Agricultural Policy reform 2014–2020 on the Italian tomato sector’, New Medit Journal, Vol 13, No 2, pp 9–19.
