Replacement of Agricultural Price Supports By Area Payments in the European Union and the Effects on Pesticide Use
Posted: 16 Feb 2007
This article determines the contribution of recent European Union agricultural policy reforms on the use of pesticides. Our theoretical model extends the multioutput generalization of the Lichtenberg-Zilberman damage control technology model developed by Chambers and Lichtenberg. Our empirical analysis uses farm-level data for a sample of French farms. Results suggest that price effects on the use of pesticides are always more elastic than area payment effects. This indicates that policy reforms consisting of a reduction in price supports in favor of area payments, may reduce application of crop protection inputs. Such policy changes, which represent a certain degree of decoupling, took place under the 1992 Common Agricultural Policy reforms.
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