Output Effects of Agri-environmental Programs of the EU
ABSTRACT:
By definition agri-environmental programs of the EU aim not only at improving
environmental quality, but also at reducing overproduction while supporting farm income.
The aim of the study is to empirically measure the success of agri-environmental programs in
regard to the objective of reducing or stabilizing production levels.
Keywords: agri-environmental programs, de-coupling, output effects
1. Introduction
Pressed by GATT (WTO) negotiations and budgetary pressure the principal objective of the
1992 CAP Reform as well as of the AGENDA 2000 Reform of the EU was to reduce
overproduction and expensive exports of certain agricultural products. To meet this goal price
supports were partly replaced by direct payments. Beside this major shift in the support
practice a number of measures to accompany output reduction were launched. The most
prominent of these “Accompanying Measures” are agri-environmental programs introduced
under Council Regulation 2078/92 and now regulated under Council Regulation 1257/99. The
stated goals of these agri-environmental programs are threefold (Council Regulation
2078/92): i) reducing or stabilizing production levels, ii) safeguarding farm income, and iii)
improving environmental quality. Therefore, by definition agri-environmental programs of the
EU aimed not only at improving environmental quality, but also at accompanying the overall
goals of the two reforms, i.e. reducing overproduction while maintaining (supporting) farm
income. In the context of the GATT-Uruguay agreement agri-environmental programs are