CAP and sustainability. Subsidies and biodiversity in six objective-1 Italian Regions

Abstract

Biodiversity is a mean and a goal of sustainability and should be preserved and encouraged. In order to protect the agricultural sector in Europe and to stabilize farmers' revenues and incomes, starting from the 1950s the Common Agricultural Policy (CAP) established a subsidies regime. Typically, policy interventions may produce two undesirable outcomes: (1) distortion of farmers' preferences, averting agricultural sector from economic efficiency; (2) production concentration towards protected cultivations, so reducing biodiversity and hindering the sustainability of agricultural activity. Under this perspective, the sustainability of agricultural policies should be evaluated in terms of their effect on agricultural biodiversity, and a trade-off between subsidies and biodiversity in agriculture is expected. This chapter investigates the relationship between subsidies and biodiversity in six Italian Objective-1 regions, finding a negative and quite stable correlation between these variables. Recent CAP reforms aimed at reducing market distortions through the adoption of decoupled measures, that supported agricultural activity regardless of the type of crop produced are expected to bring positive effects on agricultural biodiversity and sustainability.