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Abstract
The agricultural direct support schemes of the European Union require that farmers comply with Cross-Compliance regulation. Further standards apply if farms become members of private certification schemes. Incentives to participate in these schemes are potentially manifold: financial rewards, standard overlap between the schemes, favorable farm structure allowing easy compliance, but also moderate expected costs in case of noncompliance. The paper develops a theoretical model explaining farmers' participation and joint compliance behavior and empirically evaluates the model using data from a survey of Austrian livestock farms. Evidence indicates that farmers weigh the importance of compliance, control, detection, and sanctions differently for the direct support and farm certification schemes but strive to comply with all rules. Hence, the theoretically expected trade-off between costs and benefits of participation occurs only to a low extent.
Acknowledgements
The data of this research was sampled within the EU 6th Framework Programme project “Cross-Compliance Assessment Tools (CCAT)” (Contract no. 44423-CCAT). We appreciate the support of Dr E. Ofner-Schröck and Mag. med. vet. E. Schröck in organizing the Austrian farm interviews used, and of Markus Kempen for helpful discussions and insight on the farmers' intrinsic compliance motivations.
Notes
1. Compared to the 31% income, share across all farm types for EU-25 in the same period (European Commission – EU FADN, Citation2011: Figure 8).
2. This overlap can be detected when most of the requirements imposed by a FCS are congruent with CC provisions. This is for example the case for most of the obligations of the “QS label” (Farmer et al., Citation2007: 39) or for requirements related to animal welfare of several labels (for pigs see: Annen et al., Citation2011; and for cattle see: Annen et al., Citation2013). One reason for the issuing of these “low-standard” FCS is sometimes that there was pressure from stakeholders to improve reputation and credibility of the product and the overall production chain.
3. Formally correct would be “participation in direct support schemes of the EU,” as this refers to the overall policy system. But we prefer the more direct terminology “participation in CC” as this directly refers to the farm standards.
4. Further detail is provided in Wieck and Annen (Citation2012).
5. Member states had some freedom in the translation of the GAECs into national and regional law, so that a quite differentiated picture of GAEC implementation across member states and regions emerges. Further details can be found in Elbersen et al. (Citation2010: Section 3.2) and Schramek et al. (Citation2006).
6. For the farmer, we assume that she is fully informed about all requirements and regulations that the farm must comply with. This assumption precludes nonintentional noncompliance/cheating. We also do not consider cases of “intentional” noncompliance that may occur when a farmer is using transition periods for certain requirements because the farm is for example due to the structural housing design not yet able to fulfill the requirement. Similarly, we ignore noncompliance that may result from a lack of competences of the farm manager. Our survey results indicate that most farmers nowadays are well educated which should allow them to deal with compliance issues when they arise.
7. See also Raggi et al. (Citation2008) for a similar formulation.
8. E.g. Realized level of space for a pig, e.g. 0.8m2 divided by required level of space, e.g. 0.7m2 would indicate a degree of compliance equal to 1.14. The knowledge of the degree of compliance may become relevant in a discussion about an increase of stringency of standards.
9. For simplicity, we assume in the following that it is equal to one.
10. We suppress the subscript i for the abbreviation DP.
11. Private control agencies usually have notification requirement to public authorities if public and food safety is affected. Given the EU wide repercussions of the dioxin food safety scandal in Germany in the year 2010, we may observe changes here.
12. This may be considered an unrealistic case, but we observe, for example on the German market for slaughter cows, that some companies pay a premium if the cattle herd of the farm is certified under the “QS” label.
13. This hypothesis goes somewhat beyond the framework of the theoretical model. It is derived from the discussion in the literature regarding compliance behavior (Nitsch & Osterburg, Citation2008; Herzfeld & Jongeneel, Citation2012).
14. Further information is available at http://www.wageningenur.nl/en/Expertise-Services/Research-Institutes/alterra/Facilities-Products/Software/CCAT.htm.
15. The results of this part are reported in Annen et al. (Citation2011) for pigs and Annen et al. (Citation2013) for cattle.
16. In addition, we also tried to specify a formal econometric model of the “willingness to participate” in FCS following a binary choice model methodology proposed in Defrancesco et al. (Citation2008). However, even though we tried several different specifications, focusing on sub-groups of the sample and different functional relationships, the results were not very convincing and thus are left out from the evaluation.
17. Referring to fines resulting from national law.
18. Even though mean and median were close together, some expected a control only once in 20 years, others every quarter of a year.