AN ANALYSIS OF CROP COSTS IN ITALIAN NITRATE VULNERABLE AREAS AND AGRI-ENVIRONMENTAL SUBSIDIES

Abstract

In several Italian regions there are severe limitations and constraints in the use of chemical inputs in farms in order to protect the environment, as a consequence of the introduction of the UE Nitrates Directive in 1991. The purpose of this paper was to assess how chemical inputs impacted on the technical efficiency in farms in function of their location in vulnerable nitrate areas and also in function of their productive specialization over three seven-year periods of Common Agricultural Policy enforcement. The Italian FADN dataset from 2004 to 2020 was used for the purpose of this research. Significant differences were estimated in all investigated types of farming, even though there was no change in technical efficiency over the different periods of CAP enforcement. A difference in technology can partially explain the differences in technical efficiency and in the excess of inputs on investigated Italian farms.