Reducing feed-food competition with direct payments? An ex-ante assessment of economic and environmental impacts

Abstract

Worldwide, feed-food competition for arable land is of rising concern. Swiss agricultural policy wants to promote grass-based cattle feeding through a voluntary direct payment program that is currently being revised. The current version of the program requires a minimum share of 75–85 per cent grass-based feed in the yearly rations for ruminants. The revision suggests financial compensation for using concentrates with limited crude protein (CP) content at different levels (18 per cent, 12 per cent, or 0 per cent CP) without limiting the amount of concentrates. In a multimodel approach, we investigated the adoption rate of the new program, and its effect on feed-food competition and environmental indicators at the national scale for Switzerland. We found that the less strict the requirements are regarding the protein content of concentrate feeds, the more cattle farmers will adopt the new program for protein-reduced concentrate feeding. We further found that, compared to the current version of the program, the revised program could have the opposite or none of the intended effects regarding feed-food competition and environmental indicators. Only banning the use of concentrates altogether moves the environmental indicators in the intended direction for the farms participating in the program. This study shows that ex-ante evaluations are important to expose ineffectual policy measures and improve their design before introducing new direct payment programs.