Farmers’ Intention towards Energy Crops Adoption under Alternative Common Agricultural Policy: An Empirical Analysis in Andalusia, Spain

Giacomo Giannoccaro, Angela Barbuto, Antonio Baselice, Pasquale Marcello Falcone
(University of Foggia, 71122 Foggia, Italy)

Abstract: The Common Agricultural Policy (CAP) reform, currently being debated among the European Member States, is likely to strengthen the role of renewable energy production in the European Union. This research aims at analyzing the farmer’s decisions towards the on-farm adoption of energy crops under alternative policy scenarios. Firstly, farmer’s stated intention for the period 2013-2020 is expressed under a scenario with the current CAP scheme and, secondly with the complete abolishment of the CAP support. A discrete choice model (Probit) is used with the aim of underling determinants of farmer’s decisions. A sample of 201 farm-households belonging to Andalusia (Spain) is analyzed. Firstly, the CAP influence on energy crops adoption for the coming years seems to be negligible. Meanwhile farmers might be more sensitive to market signals. Secondly, in the event of CAP liberalization a larger number of farmers would exit from the sector leaving farmlands available for new users. Finally, also in line with the innovation adoption literature variables such as off-farm labor factors, farm typology specializations, size of farmland, farmer’s age and education are relevant in the adopting process.

Key words: energy crops; adoption of innovation; farmer’s behavior; European Union; policy

JEL codes: Q18, Q4