Marginal Farmers and Agri-Environmental Schemes: Evaluating Policy Design Adequacy for the Environmental Fallow Measure

Abstract

This paper examines the factors affecting farmer's participation in an agri-environmental scheme (AES) in marginal areas implying few changes in the traditional farm management (environmental fallow). The enrolment theoretical micro-economic model reveals that farmers` (extrinsic) factors as well as decision maker's (intrinsic) factors are important for farmer's participation, without disregarding the role of social capital. The farm and farmer characteristics (intrinsic factors) as well as the influence of the social capital have been tested trough the specification and estimation of an adoption model for dry-land marginal farmers in Granada (southern Spain). 300 farmers with cereal dry-land specialization have been surveyed in order to identify factors influencing their enrolment decision and to derive scheme design modifications to improve the AES success, understood as participation rate. Due to the fact that the effects of applying this measure do not have significant effect on the food and animal production, the participation decision is hypothesized to be mainly driven by the farmer's attitude reflecting the importance of the social capital in order to educate farmers. Nevertheless, AES interaction with other agricultural policies, such as LFA compensatory payments, restraints the possibility of this scheme's success specially when these payments imply greater financial resources. Further research is needed to see whether this same pattern holds when considering AES implying a more intensive change in the farm management.