Assessing the impacts of chemicals reduction on arable farms through an integrated agro-economic model

Abstract

CONTEXT

The concurrent global demands of ensuring food production, preserving the environment, and responsibly managing natural resources, shape the formulation of EU policies, influencing farmers' decision-making processes and production activities. In this context the Farm to Fork Strategy plays a crucial role, setting specific targets such as a 50 % and a 20 % reduction in pesticides and fertilizers use by 2030.

OBJECTIVE

This paper addresses the growing concern regarding the potential adverse effects of the Farm to Fork Strategy's targets on EU agricultural production, with a particular focus on Italian arable farms cultivating maize. The objectives are to analyze the impact of F2F targets on chemical reduction on Italian arable farms and maize grain production, identifying vulnerable areas and farms.

METHODS

A Farm Accountancy Data Network sample of 395 arable farms is analyzed through an integrated approach, combining an agro-economic supply model with an econometrically estimated translog production function. This integration enhances the model's flexibility, endogenizing maize grain gross saleable product, fertilizers, and pesticide quantities. This approach enables an assessment of the F2F targets' economic impacts in terms of economic variables and resource use, production output, and chemical intensity at the farm and crop level.

RESULTS AND CONCLUSIONS

Our findings indicate that reducing chemical inputs may lead to declines in agricultural production, income, and added value for Italian arable farms in the short to medium term, alongside reductions in variable costs, irrigation water, and labor. Maize grain production is particularly vulnerable in less suitable areas, such as the Central-South. However, significant impacts are also observed in more intensive regions like North-West Italy, while the North-East is less affected due to greater input efficiency and lower costs. While crop diversification helps mitigate the impact at the farm level, it does not fully offset the effects on maize production.

SIGNIFICANCE

The application of uniform targets across Europe poses a significant risk to agricultural production in the short term, especially for certain sectors. To facilitate the transition to low-input agriculture, it is crucial to develop region-specific strategies and provide support to vulnerable areas and farms. The EU Commission's reconsideration of chemical reduction targets introduces new challenges, highlighting the need for solutions that balance production and environmental sustainability. This underscores the critical role of such analyses in understanding the dynamics of production processes and the impact of such policies by identifying specific vulnerabilities of sectors, regions, and contexts and supporting policy implementation.