Curbing methane emissions from Italian cattle farms. An agroeconomic modelling simulation of alternative policy tools.

Methane (CH4) emissions from cattle farms have been prioritised on the EU agenda, as shown by recent legislative initiatives. This study employs a supply-side agroeconomic model that mimics the behaviour of heterogeneous individual farms to simulate the application of alternative economic policy instruments to curb CH4 emissions from Italian cattle farms, as identified by the 2020 Farm Accountancy Data Network survey. Simulations consider increasing levels of a tax on each tonne of CH4 emitted or of a subsidy paid for each tonne of CH4 curbed with respect to the baseline. Individual marginal abatement costs are also derived. Besides, to consider possible technological options to curb emissions, a mitigation strategy is simulated, with different levels of costs and benefits to appraise the potential impacts on the sector. Relevant reductions in operating income are foreseen, the most substantial in farm types and size classes characterised by lower levels of carbon productivity. The introduction of the mitigation strategy shows that the outcome in terms of mitigation potential, without undermining production level, highly depends on the implementation costs, but can also vary widely due to heterogeneous farms' economic performances. Policy implications are also derived.

Greening and legume-supported crop rotations: An impacts assessment on Italian arable farms.

Since the 1990s, the European Union has progressively and structurally reformed the Common Agricultural Policy with a gradual integration of environmental objectives. For the period post-2020, one of the most relevant changes could be the upgrading of the crops diversification, imposing it as an obligation to rotate crops by introducing legumes in the cropping patterns. This paper proposes an assessment of the possible effects of such obligation on the arable crops sector in Italy. The analysis uses a mathematical programming model calibrated and validated by way positive approach and is conducted on data of about 2800 Italian farms of the Farm Accountancy Data Network. Moreover, the analysis is structured by geographical area and altimetric level in order to consider typical specificities of Italian farms according to their localization. Our results show the legume-supported crop rotations reduce the general environmental pressure of agricultural activities and affect a large part of the arable land, against reduced economic impacts. In the majority of farms the lost income per hectare is lower than the national average value of the decoupled payments. Yet, the legume-supported crop rotations determine a reduction in the production of main crops and, especially in some areas, negative economic and social impacts. All this suggests that the legume-supported crop rotations are an opportunity to adopting sustainable agricultural practices and that Member States could implement the agronomic practice differently for areas and use additional instruments to meet the EU's objectives. Especially the decoupled and coupled payments are needed to limit economic losses and incentivize farmers towards virtuous behaviour.

CAP's environmental policy and land use in arable farms: An impacts assessment of greening practices changes in Italy.

The study assesses the possible impact of first pillar reform of the Common Agricultural Policy by focusing on the new greening rules defined by the recent Omnibus regulation. The analysis was carried out on a Farm Accountancy Data Network sample of Italian farms using by a Positive Mathematical Programming model. Moreover, our analysis is stratified by geographical area and altimetric level and uses some additional environmental and social indicators beyond those economic. The results indicate that the new greening rules generate positive but limited environmental impacts, which reinforce those already determined by the previous CAP reform, for example the use of chemical fertilizers is further reduced. These additional positive environmental impacts are obtained with very limited income reductions. Yet, the impacts on the various geographical areas and their altimetric levels are different, and sometimes controversial. For example, there is a growth in the use of pesticides in the northern plains, due to the increase in rice and soybean areas. On the other hand, agricultural employment in Southern Italy decreases, where agriculture is an important source of employment for the rural population. This reduction also affects the mountain areas, thus accentuating the already high risk of abandonment. All this suggests that more targeted measures will have to be implemented in the future planning of agricultural policy, so as to shape the various actions according to the characteristics of the various rural areas, as well as to the specific priorities of the Member State.