Environmental Engineering Reference
In-Depth Information
where O is the outputs (in Euros/hectare), I the inputs used, IC the intermediate
consumption, S the amount of subsidies received (excluding environmental subsi-
dies), ES the amount of environmental subsidies and ES.O, ES.I, ES.IC, ES.S are
interaction terms (environmental subsidies crossed with outputs, inputs, intermedi-
ate consumptions and subsidies respectively).
Data have been analysed on a yearly basis because the series are not stationary
and thus a panel analysis would lead to unrealistic conclusions. Moreover we
assumed that the relations between the various drivers of farm income evolve over
time. This assumption is underlined by the sign of some estimators that vary from
1 year to the other. In particular, the constant is negative for most years but becomes
positive for year 2004. Similarly, the marginal effect of the environmental subsidies
on the output is negative or positive depending on the year considered. Analysis of
regression (2) suggests that:
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The effect of output and subsidies on farm income does not vary much from 1 year
to the other, although the output price and the producer support subsidies rates
are totally different from the early 1990s to the mid-2000s: in the early 1990s,
agricultural products have rather high prices that were drastically decreased in
1992 and then in 2000, while subsidies greatly increased (producer support
shifted from price support to direct income support).
There are significant differences for the effect of the inputs and intermediate
-
consumptions drivers between the years. This suggests that there has been an
evolution of the farms' combination of means and we can assume a modification
in the jointness rates between commodity and non-commodity outputs within
the farms.
Some environmental outputs are subsidised, but the influence of the agri-
-
environmental support programmes reduced since the mid-1990s, although the
payments increased during that period. This suggest that despite environment
is more and more subsidised along time (on our sample data, the environ-
mental payments increased by a factor of 2.3 between 1995 and 2004), the
reorganisation of the other drivers compensate their relative effect on farm
income over time.
More important is the effect of the environmental subsidies on the marginal effect
-
of output, input, intermediate consumption and non-environmental subsidies on
the farm income: the environmental subsidies moderate the marginal effect of the
input, intermediate consumption and non-environmental ones on the farm income.
Moreover, the environmental subsidies moderate the marginal effect of the outputs
on the farm income in the early 2000s, but this effect reverses in 2003 and 2004,
just as if after several years of environmental programmes, some of the farms have
been able to reorganise themselves to take advantage of a higher degree of joint-
ness between commodity and non-commodity outputs.
Even restricted to economic data, it is possible to conclude that the EU environmental
policies have modified the way the farms combine their intermediate consumptions
and the inputs they use in their profit function: there are links between the provision
of environmental outputs and the evolution of the farm profit function.
