Aligning agri-environmental subsidies and environmental needs: a comparative analysis between the US and EU

Sofia Biffi,Eleonore Louise Slabbert,Guy Ziv,Kate Tiedeman,Murat Okumah,Ralf Seppelt,Dietrich Epp Schmidt,Nicole Motzer,Bart Crezee,Haoluan Wang,Rebecca Traldi,Michael Beckmann,Lukas Egli

doi:10.1088/1748-9326/abfa4e

Abstract

The global recognition of modern agricultural practices’ impact on the environment has fuelled policy responses to ameliorate environmental degradation in agricultural landscapes. In the US and the EU, agri-environmental subsidies (AES) promote widespread adoption of sustainable practices by compensating farmers who voluntarily implement them on working farmland. Previous studies, however, have suggested limitations of their spatial targeting, with funds not allocated towards areas of the greatest environmental need. We analysed AES in the US and EU—specifically through the Environmental Quality Incentives Program (EQIP) and selected measures of the European Agricultural Fund for Rural Development (EAFRD)—to identify if AES are going where they are most needed to achieve environmental goals, using a set of environmental need indicators, socio-economic variables moderating allocation patterns, and contextual variables describing agricultural systems. Using linear mixed models and linear models we explored the associations among AES allocation and these predictors at different scales. We found that higher AES spending was associated with areas of low soil organic carbon and high greenhouse gas emissions both in the US and EU, and nitrogen surplus in the EU. More so than successes, however, clear mismatches of funding and environmental need emerged—AES allocation did not successfully target areas of highest water stress, biodiversity loss, soil erosion, and nutrient runoff. Socio-economic and agricultural context variables may explain some of these mismatches; we show that AES were allocated to areas with higher proportions of female producers in the EU but not in the US, where funds were directed towards areas with less tenant farmers. Moreover, we suggest that the potential for AES to remediate environmental issues may be curtailed by limited participation in intensive agricultural landscapes. These findings can help inform refinements to EQIP and EAFRD allocation mechanisms and identify opportunities for improving future targeting of AES spending.

Highlights

Global concerns surrounding the negative effects of modern agricultural practices are growing, due to associated biodiversity loss, worsening water and air quality, and increased nutrient loading, soil erosion, and climate change (Laurance et al 2014, Leip et al 2015, UNESCO 2015, Beckmann et al 2019)
In this study we take a broader perspective, analysing agri-environmental subsidies (AES) in the United States (US) (EQIP) and the European Union (EU) (EAFRD), asking: are AES going where they are most needed to achieve environmental goals? As previous empirical work indicates a potential mismatch of payments and environmental needs, we explore to what extent this might differ in the US and the EU, and expand on previous research by analysing the extent to which key socio-economic factors may moderate the spatial allocation of AES
The differences between US and EU AES systems are well documented; by developing a consistent framework to assess environmental need, we have identified successes and mismatches in subsidies allocation, and common challenges and opportunities for future policy development and research in both the US and the EU

Summary

Introduction

Global concerns surrounding the negative effects of modern agricultural practices are growing, due to associated biodiversity loss, worsening water and air quality, and increased nutrient loading, soil erosion, and climate change (Laurance et al 2014, Leip et al 2015, UNESCO 2015, Beckmann et al 2019). Maintaining agricultural productivity amidst rapid environmental change requires integrated policy responses, and the widespread adoption of sustainable agricultural practices is a pathway to increase agricultural outputs while reducing environmental impacts (UN 2015, Bennett 2017, OECD 2017, Kremen and Merenlender 2018, Pe’er et al 2020, Weber et al 2020). In the United States (US) and the European Union (EU)—two of the largest agricultural producers and markets globally—a number of policies seek to ameliorate the negative effects of agricultural production and to support environmentally friendly management. We use AES as an umbrella term covering public schemes devoted to the voluntary uptake and implementation of environmentally sustainable agricultural practices. These are generally known as ‘best management practices’ in the US, and ‘agri-environment schemes’ in the EU. In the EU, we consider targeted measures of the European Agricultural Fund for Rural Development (EAFRD) under Common Agricultural Policy (CAP) Pillar II aimed at ‘fostering agricultural competitiveness and ensuring suitable management of natural resources and climate action’ (European Parliament 2020)

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Conclusion