Private transaction costs and environmental cross compliance in a crop region of Southwestern France

Abstract

The 2003 review of the common agricultural policy (CAP) has introduced several new policy tools, among which is cross compliance. The introduction of this new policy entails production costs, along with other types of costs arising at the farm level: administrative, information and organisational costs, called transaction costs. The purpose of this paper is to determine the nature of transaction costs and to assess them. A survey conducted in 2006 among a sample of 39 farmers followed by a descriptive statistical analysis (multiple correspondence analysis, MCA) permits to associate farmer profiles with different levels of incurred transaction costs. These profiles reveal the impact which the farmers' responsibilities (professional networks) and the role of voluntary commitments previously undertaken may have on the nature and importance of transaction costs. This paper opens up new perspectives on the adoption criteria that should be taken into account in the evolution of agri-environmental regulations.