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Guidelines for Cost-effective Agri-environmental Policy Measures

image of Guidelines for Cost-effective Agri-environmental Policy Measures

Improving the environmental performance of agriculture is a high priority in OECD and many non-OECD countries. This will be of increasing concern in the future given the pressure to feed a growing world population with scarce land and water resources. Policy has an important role to play where markets for many of the environmental outcomes from agriculture are absent or poorly functioning.   

This study focuses on the design and implementation of environmental standards and regulations, taxes, payments and tradable permit schemes to address agri-environmental issues. It deals with the choice of policy instruments and the design of specific instruments, with the aim of identifying those that are most cost-effective in very different situations across OECD countries.  

Key conclusions from the study are that: there is no unique instrument that promises to achieve all agri-environmental policy goals; the cost effectiveness of payments systems could be improved by using performance-based measures; and policy mixes need to combine policy instruments that complement and not conflict with each other.

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Annex B

Cross-compliance in the European Union

The EU approach to cross-compliance includes partial or full loss of payments if the farmer fails to comply with mandatory standards stemming from existing legislation and the maintenance of good agricultural and environmental conditions. Cross-compliance creates a link between several separate policies, amongst them income support and selected statutory standards or requirements. These relate to environment, animal and plant health, public health and animal welfare and identification and registration of animals and are enshrined in existing laws. By introducing reduction of payments due to non-compliance the effectiveness of enforcement of existing environmental laws could be expected to increase.

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