The impact of agri-environmental measures on farms’ costs, labour and income

Abstract

This study examines the impact of agri-environmental measures on crop and livestock costs, labour inputs and income growth, using FADN farm-level data for the years 2006 and 2013, covering the 2007–2013 programming period in 22 EU countries. Employing a difference-in-differences model combined with coarsened exact matching, the results show that while some specific production costs rise on subsidized farms, these increases differ by region. Income growth and labour inputs are consistently higher across all regions. In particular, crop protection costs rise significantly in Western countries, while labour inputs do so in Southern and Eastern countries and at the EU level. Positive and significant effects on productivity outcomes are observed in the EU and Western EU countries.