Cross Compliance as payment for public goods?

Understanding EU and US agricultural policies

authored by

Claas Meyer, Bettina Matzdorf, Klaus Müller, Christian Schleyer

Abstract

Cross Compliance (CC) is a mechanism for encouraging farmers to fulfill certain environmental conditions in return for governmental support payments. Introduced to United States (US) and European Union (EU) agricultural policy from the 80s onwards, upcoming new US (Farm Bill 2012) and EU (Common Agricultural Policy after 2013) policies will include CC. Cross Compliance is seen (i) as a policy for enforcing environmental objectives or (ii) as a way to organize and reward agricultural public good production. In recent years, the instrument's effectiveness and efficiency have been criticized. To validate the deviating understandings, we drew back on an economic institutionalist perspective. We found that regarding EU CC as payment for public goods does not generally align with the existing German property rights distribution. In both the EU and US, CC standards above those contained regulatory law have characteristics of a payment for public goods but create severe problems. We conclude that CC, even if useful for triggering and broadening environmental protection efforts, may cause several long-term problems. Therefore, the rights structure should be clearly communicated, law enforcement function should be temporary, the instrument should be included in an overall concept, and payments should be better linked to the environmental output.

External Organisation(s)

Leibniz Centre for Agricultural Landscape Research (ZALF)
Helmholtz Centre for Environmental Research (UFZ)

Type

Article

Journal

Ecological economics

Volume

107

Pages

185-194

No. of pages

10

ISSN

0921-8009

Publication date

11.2014

Publication status

Published

Peer reviewed

Yes

ASJC Scopus subject areas

Environmental Science(all), Economics and Econometrics

Electronic version(s)

https://doi.org/10.1016/j.ecolecon.2014.08.010 (Access: Closed)