Delivering public goods in agriculture: the cost of green payments for Italian farms
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The recent CAP reform proposes a green component of the first pillar of the CAP that
remunerates farmers for the provision of environmental public goods, by conditioning the 30%
of direct payments to specific requirements. The paper focuses on two of the greening
obligations of the reform proposal: the diversification of crops and the establishment of the
ecological focus areas. The paper, through FADN data, aims at quantifying the impact of these
measures on the gross margin (GM) of farms specialized in arable crops in Italy.
The results show different impacts of the green payments on arable crops in Italy according to
the characteristics of farms, their location and their economic and physical size, showing data
the greening is an “horizontal measure” that does not take into adequate account the specific
conditions where farmers operate and the different costs of providing public goods through
agriculture.