Marianne Lefebvre

Agricultural landscapes as multi-scale public good and the role of the Common Agricultural Policy

During the last 50 years, the Common Agricultural Policy (CAP) has impacted the evolution of European agricultural landscapes by driving changes in land use and farming practices. We propose a typology characterising the scales relevant for agricultural landscapes management and argue that action is required on three scales: (1) a landscape oriented management at the farm level; (2) the coordination of land managers’ actions at the landscape level; and (3) the conservation of the diversity of agricultural landscapes in the EU. We provide evidence that until now the CAP has mainly focused on the first scale. We also illustrate how agricultural policy could encourage coordinated actions at the landscape- and EU-scales. In particular, we propose policy instruments to coordinate actions of individual land owners (e.g. collective bonus in agro-environmental contracts or support to environmental cooperatives (scale 2)). We also analyse how the recognition and transposition of the European Landscape Convention could promote trans-frontier landscape cooperation in order, not only to conserve high-quality rural landscapes, but also to ensure the conservation of the diversity of EU landscapes (scale 3). This paper provides a knowledge base to support an integrated CAP design in the direction of improved landscape management, as an important component of the EU project towards more sustainable agriculture.

Do Security-Differentiated Water Rights Improve the Performance of Water Markets?

Most existing water markets combine water rights trading and water allocation trading. Offering security-differentiated water rights can make the market more efficient and allow water users to manage the risks of supply uncertainty better. We conduct a laboratory experiment which compares two designs for water rights; one with a single security level and another with two security levels. We find that a two security level system increases overall profits when transactions costs are lower on the water rights market than on the water allocation market. It also improves risk allocation by allowing subjects to trade-off profits variability against expected profits according to their risk type and this result is robust to the existence of transactions costs on either market. Copyright 2012, Oxford University Press.

An analysis of the intention-realisation discrepancy in EU farmers’ land investment decisions

The article analyses the discrepancy between farmers’ investment intentions and the observed realisations. We focus on intentions to investment in land on the part of 171 farmers in 6 EU case study areas (collected in 2006) and their realised investments between 2006 and 2009. While the farmers who had no intention to invest mostly follow their plans, only 36% of those who intended to invest in 2006 have done so by 2009. We set up a recursive bivariate probit model in which intention is an endogeneous regressor of the realisation. We show that stated intentions are a reasonably good predictor of realised actions, and highlight drivers of the discrepancy between intentions and realisations, such as pessimistic expectations regarding the future of both agricultural markets and the farm when no successor is known. Some recommendations on the use of stated intention surveys to study the farming sector are provided.

Sharing Rules for Common-Pool Resources When Self-Insurance is Available

When a group of users who share a common-pool resource through a system of licenses is exposed to the risk of shortage, there is a need to establish a sharing rule. Such sharing rule is likely to impact the individual decisions to self-insure, i.e., to rely on a secure but costly resource instead of the free but uncertain common-pool resource. We determine the optimal sharing rule and the optimal diversification between the common-pool resource and the safe resource as a function of the agents’ individual characteristics, the distribution of the common-pool resource availability, and the cost of the safe resource. We find that, for a group of agents with heterogenous risk preferences, a perfectly informed regulator can obtain the optimal diversification level by imposing a rationing rule which shares the resource between agents proportionally to their relative risk tolerance. We illustrate and interpret our results in the context of water management in France.

How) can economic experiments inform EU agricultural policy

This report provides an overview of the potential contribution of economic experiments to the Common Agricultural Policy evaluation toolbox. The methodology of economic experiments is briefly described in chapter 2. Chapter 3 presents examples of experimental studies relevant for the analysis of the Common Agricultural Policy. Chapter 4 discusses whether there is room for economic experiments in the EU evaluation toolbox. Chapter 5 identifies the main challenges when implementing economic experiments. Chapter 6 provides a set of recommendations, arising from the discussions between the authors of this report and policy officers from DG AGRI, relative to the introduction of economic experiments in the CAP evaluation toolbox.