Aligning agri-environmental subsidies and environmental needs: a comparative analysis between the US and EU

Abstract

The global recognition of modern agricultural practices’ impact on the environment has fuelled policy responses to ameliorate environmental degradation in agricultural landscapes. In the US and the EU, agri-environmental subsidies (AES) promote widespread adoption of sustainable practices by compensating farmers who voluntarily implement them on working farmland. Previous studies, however, have suggested limitations of their spatial targeting, with funds not allocated towards areas of the greatest environmental need. We analysed AES in the US and EU—specifically through the Environmental Quality Incentives Program (EQIP) and selected measures of the European Agricultural Fund for Rural Development (EAFRD)—to identify if AES are going where they are most needed to achieve environmental goals, using a set of environmental need indicators, socio-economic variables moderating allocation patterns, and contextual variables describing agricultural systems. Using linear mixed models and linear models we explored the associations among AES allocation and these predictors at different scales. We found that higher AES spending was associated with areas of low soil organic carbon and high greenhouse gas emissions both in the US and EU, and nitrogen surplus in the EU. More so than successes, however, clear mismatches of funding and environmental need emerged—AES allocation did not successfully target areas of highest water stress, biodiversity loss, soil erosion, and nutrient runoff. Socio-economic and agricultural context variables may explain some of these mismatches; we show that AES were allocated to areas with higher proportions of female producers in the EU but not in the US, where funds were directed towards areas with less tenant farmers. Moreover, we suggest that the potential for AES to remediate environmental issues may be curtailed by limited participation in intensive agricultural landscapes. These findings can help inform refinements to EQIP and EAFRD allocation mechanisms and identify opportunities for improving future targeting of AES spending.

Adoption and potential of agri‐environmental schemes in Europe: Cross‐regional evidence from interviews with farmers

“…The implications for ecological effectiveness are therefore indirect and strongly linked to the concept of additionality (Engel, 2016), that is whether AES lead to an actual change of practice or rather subsidize a practice that the farmer was already implementing on their land (or, at least, was already considering to implement). Furthermore, the spatial placement of AES plays an important role in determining their ecological effectiveness—while on marginal land, they may entail the lowest opportunity costs, it may well be the intensively managed, productive areas where they would make the most significant difference in terms of ecological effectiveness (see Biffi et al, 2021; Früh‐Müller et al, 2019; Paulus et al, 2022). Also, to be ecologically effective, most AES need to be adopted long‐term themselves (e.g.…”

Agriculture and food security under a changing climate: An underestimated challenge

“…37 Subsidies based on the area farmed, as it is still the rule in the European Union or the US, make such forms of assessment completely unfeasible. 38 , 39 …”

Financing the Agri-Environmental Policy: Consequences on the Economic Growth and Environmental Quality in Romania

“…In Slovenia, increased production, especially in the beef and dairy sectors, which was supported by direct payments of the common agricultural policy, and a forest succession in marginal areas have been identified as potential key factors in the recent loss of agricultural land biodiversity in Slovenia [ 45 ]. In another study, Biffi et al [ 46 ] found that higher spending on agri-environment schemes was associated with areas with low levels of soil organic carbon and high greenhouse gas emissions in both the US and the EU, with inconsistencies identified between the funding and environmental needs, namely, not targeting those areas with the highest water stress, that were threatened with biodiversity loss, soil erosion or nutrient runoff.…”