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The Effect of Mandatory Agro-Environmental Policy on Farm Fertiliser and Pesticide Expenditure


  • Jūratė Jaraitė,

  • Andrius Kažukauskas

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    • Jūratė Jaraitė and Andrius Kažukauskas are with the Centre for Environmental and Resource Economics and the School of Business and Economics, Umeå University, SE-901 83, Umeå, Sweden. E-mail: for correspondence. Andrius Kažukauskas’ research was partly funded under the Research Stimulus Fund 2007 of the Irish Department of Agriculture and Food, whose support is gratefully acknowledged. The authors thank Carol Newman for her valuable comments on the early draft of this paper and language editing. We also thank Christoph R. Weiss, the participants at the CERE workshop in Ammarnäs (April, 2011) and two anonymous reviewers for their helpful comments. We are grateful to the FADN unit for providing us the dataset and Daragh Clancy with Fiona Thorne from Teagasc for helping us to obtain access to this dataset.


EU farmers are subject to mandatory cross-compliance measures, requiring them to meet environmental conditions to be eligible for public support. These obligations reinforce incentives for farmers to change their behaviour towards the environment. We apply quasi-experimental methods to measure the causal relationship between cross-compliance and some specific farm environmental performance. We find that cross-compliance reduced farm fertiliser and pesticide expenditure. This result also holds for farmers who participated in other voluntary agro-environmental schemes. However, the results do not support our expectations that farmers who relied on larger shares of public payments had a stronger motivation to improve their environmental performance.