Abstract:

This paper will identify possible environmental policies aiming to reduce agricultural pollution and how they will affect farming decisions. Specifically, emphasis will be put on the impacts of those policies in combination with the CAP-reform on the way farmers will use production inputs induced by different incentives schemes. Although these questions are rather political, they do influence both the forward and backward economic linkages of the agricultural activities. Input industries must be aware not only of the policies, but need to trace how farmers change their behaviour accordingly. Empirical results will be used to illustrate how different policies shift the production systems and how these ultimately affect input use. In particular, preliminary results obtained from research carried out in Spain and in France will be posed as examples of those trends. The paper finishes with a set of recommendations extensive to the input industries operating in the newly regulated agriculture.