Farm structure and farm characteristics links to non-commodity outputs and externalities. An annotated bibliography of the French academic literature

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Farm structure and farm characteristics links to

non-commodity outputs and externalities. An annotated

bibliography of the French academic literature

S. Arnaud, Pierre Dupraz

To cite this version:

S. Arnaud, Pierre Dupraz. Farm structure and farm characteristics links to non-commodity outputs and externalities. An annotated bibliography of the French academic literature. [Research Report] Inconnu. 2005, 26 p. �hal-01931549�

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FARM STRUCTURE AND FARM

CHARACTERISTICS-LINKS TO NON-COMMODITY OUTPUTS AND EXTERNALITIES.

AN ANNOTATED BIBLIOGRAPHY OF THE FRENCH ACADEMIC LITERATURE.

INRA Rennes

4, allée Adolphe Bobierre 35 011 RENNES Cedex. FRANCE.

Rennes, February 2005.

REPORT TO THE OECD

Arnaud S., Dupraz P.

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INTRODUCTION.

This report summarises the French academic literature on the tapie of farm structure and farm characteristics and their impacts on the production of non-commodity outputs and extemalities.

Different search techniques was used to identify relevant and accurate publications. The database of the Centre of Agricultural Economies at the National Institute of Agronomie Research (INRA) was firstly explored using key words such as agriculture (agriculture), externalities (externalités), environment ( environnement), multifunctionnality (multifonctionnalite), rural development (développement rural), pollution (pollution), and farm structure (structure des exploitations agricoles). This research was then extended to the database of the INRA Department of economics. This search was supplemented by a Google search of Internet using the same key words and phrases. When relevant publications were obtained, while their references were consulted for additional materials.

Twenty relevant publications were found, addressing the report issues. Although the authors tried to be as exhaustive as possible, other publications dealing with the purposes might have been forgotten.

Most of the selected papers characterise the relationship between agriculture and environment in order either to evaluate consequences of public policies, or to make propositions for implementing environmental policies.

Many of the consulted publications deal with pollution issues. Indeed, nitrogen and pesticide pollution is the main concem of environmental policies affecting agriculture in France.

Only few publications tackle the relationship between farm characteristics and the provision of multifunctional benefits. Indeed, most of the papers on multifunctional agriculture are at a rather conceptual level and are written in a policy oriented way.

The present paper follows the guidelines set out by the OECD (2004) and takes also into consideration the structure of a similar study carried out by Latacz-Lohmann, Breustedt, and Weertz (2004). However, a specific section has been added in the beginning of the report, tackling the relationship between the type of farming and the impact on production of non-commodity outputs and extemalities. Indeed, numerous French studies compare environmental impacts of different types of farming and it sounds relevant to expose their findings.

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1 Characteristics of the

farm

1.1 Type of farming

First, the relationship between farm characteristics and non---commodity outputs and

externalities depends on the type of farming and the relative weight of various commodity

productions.

To compare the environmental impacts of various types of farming, we can firstly use

different studies aiming at analysing the relationship between agriculture and environment in

various types of farming:

Field crops (Meynard, Dupraz, and Dron, 2002);

Fruit arboriculture (Codron, Robert, Jacquet, and Sauphanor, 2002);

Cattle livestock production (Chatellier and Vérité, 2003);

Pig production (Piot-Lepetit, Le Moing and Ulvé, 2003).

Second, some studies aim at comparing various types of farming at the regional level:

Mollard and al. (2000) compare the environmental effectiveness of cereal farms, dairy

farms and mixed cropping and livestock farms on the plain of "Bièvre", in South-eastern

France.

Piot-Lepetit (1998) compares technical and environmental effectiveness of dairy farms to

beef cattle farms and dual-purpose cattle farms in Brittany and Pays de Loire, in

North-western France.

The APEX Scientific Group (1995) compares nitrogen balance of dairy farms to nitrogen

balance of beef cattle or dual-purpose cattle farrns in Basse-Normandie, in North-western

France.

Le Goffe, Piot-Lepetit, and Rainelli (1996) compare nitrogen emissions of various pig

farming systems on the coast of "Rade de Brest", in Brittany.

Third, the evaluation of agro-environmental policies in France characterises, in indirect way,

the types of farming that contribute to the provision of environmental outputs. (Berthelot ,

Chatellier and Colson, 1999; MAAP AR, 2003).

1.1.1 Type of farming and impacts on water quality

The most important environmental stake for agriculture in France is water quality and notably

pollution by pesticides and nitrogen. Hence, most references deal with organic nitrogen use and nitrate leaching.

❖ Relative impacts of cereal farms, dairy farms and mixed cropping and livestock farms on

water guality

Meynard and al. (2002) notice that cereal farms present the most important risks to

pollute water by pesticides and nitrates. Indeed, field crop is the type of farming the most important consumer of chemical products in France.

This observation is confirmed by Mollard study (2000) which aims at measuring the

environmental effectiveness of the farms on the plain of "Bièvre".

From 1993 to 1996, three types of farming have been compared: Cereal farms;

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Dairy farms;

Mixed cropping and livestock farms.

The analysis has been based on a Data Envelopment Analysis (DEA).

This approach results from the observation that the use of inputs in ineffective way is one of the main cause of pollution. It consists in using a linear programming to construct the production function frontier of the farm sample. The calculated measures of effectiveness evaluate the farm performance compared to the production fonction frontier constructed from the sample data. Thus, a farm is considered as effective when its score is near to 1.

The data survey used by Mollard is made up of 58 to 69 farms, according to years.

The results show that the dairy farms have the best technical performance with an average possibility of input reduction of7 % in 1993 and only 1 % in 1995.

Moreover, farm performances relative to fertilisers and nitrogen management are evaluated. Overall, dairy farms are the most effective in fertiliser management although the possibility of fertiliser reduction goes from 4 % in 1995 to 7 % in 1996, with constant outputs. On the contrary, cereal farms are the less effective in fertiliser management. So, it is possible to improve economic and environmental performances of cereal farms by reducing the use of fertilisers.

Related to the management of the nitrogen surpluses, the results show that in 1993, cereal farms are also less effective than dairy farms and mixed cropping and livestock farms. However, this difference is reduced in 1994 with an increase of the cereal farm performance. So, on the plain of "Bièvre", water pollution risks are mainly due to the use of nitrogen fertilisers by cereal farms.

This result obtained at regional level may be generalised. Indeed, water pollution impacts of "grande culture" is particularly important because this type of farming covers a large part of the French usable agricultural area (UAA).

However, fruit arboriculture is much more intensive related to the per hectare use of chemicals products (fungicides and pesticides) but the low area involved (1 % of the French UAA) keeps the water pollution risks at a low level. (Codron and al., 2002).

Besides, water quality is also the main stake of livestock production, particularly in areas with high livestock density. However, the overall nitrogen balance mainly depends on the type of livestock farming (dairy cattle, suckling cattle, beef cattle, pig production ... ).

❖ Relative impacts of different livestock types of farming on water quality

The APEX Scientific Group (1995) compares average nitrogen surpluses evaluated for different types of farming in Basse-Normandie and also, in Brittany and Pays de Loire. Indeed, the study deals with the impacts of nitrogen surpluses on water quality. The method used to evaluate nitrogen surpluses is quite simple: only farm nitrogen in-and-out flows are estimated (fertilisers, manure, feeds, and animais; production and manure).

This comparison shows that greater average nitrogen surpluses are observed for pig production (525 kg N/ha/year) and poultry production (400 kg N/ha/year) whereas average nitrogen surpluses are quite low for suckling cattle farming (60 kg N/ha/year). Dairy production presents medium average nitrogen surpluses (about 120 kg N/ha/year).

Actually, pig production implies important nitrogen pollution especially in Brittany where pig systems are quite intensive. This issue is moreover addressed by Le Goffe and al. (1996), and by Piot-Lepetit and al. (2003).

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Le Gaffe and al. ( 1996) compare three pig production farming systems on the coast of "Rade de Brest" in 1991.

The 371-farm surveyhas been selected from the FADN (see Text box 1): 107 livestock farms of Type of Farming (TF) 50 "Specialist granivores"; 129 livestock farms of TF 71 "Mixed livestock, mainly grazing livestock"; 135 livestock farms of TF 72 "Mixed livestock, mainly granivores".

The DEA method (see above) has been used to evaluate the performance of those farms. Then, three groups have been built in accordance of the score obtained by the farms: 1; between 0.85 and 1; and inferior to 0.85.

The results show that pig farms (TF 50) have the highest average score (0.94) whereas granivore farms (TF 72) have an average score of 0.87 and grazing livestock farms of 0.84. However, scores in the latter type of farming are very heterogeneous. Indeed, the proportion of these farms having a score of 1 is the highest (59 % of farms).

Considering the environmental effectiveness, it is found that pig farms produced more nitrogen when they are technically effective.

For the two other types of farming, the group technically less effective use more fertilisers but produce less organic nitrogen. So, it can be possible to improve the technical and the environmental performances of these farms by reducing the use of fertilisers.

To conclude, pig farms are the most technically and economically effective but also the most polluting. So, it is impossible to reduce pollution risks of pig farms without decreasing their economic effectiveness.

Text box 1: The Farm Accountancy Data Network.

The FADN was launched in 1965, when Council Regulation 79/65 established the legal basis for the organisation of the network. It consists of an annual survey carried out by the Member States of the European Union. The services responsible in the Union for the operation of the

F ADN collect every year accountancy data from a sample of the agricultural holdings in the European Union. Derived from national surveys, the F ADN is the only source of micro

-economic data that is harmonised. The methodology applied aims at providing representative data along three dimensions: region, economic size and type of farming (TF).

To go thoroughly into these results, the Piot-Lepetit and al. (2003) results have to be analysed. The authors evaluate the effectiveness of various pig production farming systems from 1996 to 2000, in France.

Seven pig production farming systems have been identified from the F ADN and then compared using the DEA method:

Big crop farms with a pig unit; Small crop farms with a pig unit; Pig production farms;

Pig production farms with a cattle unit; Dairy farms with a pig unit;

Small dairy farms with a pig unit; Beef cattle farms with a pig unit.

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The results show that the most effective farms are the pig production farms whereas the small

dairy farms with a pig unit are the least effective.

The estimation of the farm performance in organic nitrogen management shows that the

average potential reduction of organic nitrogen is only of about 2 % to 3 %. According to the authors, this result reveals the restrictive environmental regulation.

Nonetheless, the pig production farming systems can be classified from the more potentially polluting to the Jess potentially polluting:

1) Sma11 dairy farms with a pig unit; 2) Beef cattle farms with a pig unit;

3) Small crop farms with a pig unit; 4) Dairy farms with a pig unit; 5) Pig production farms;

6) Big crop farms with a pig unit;

7) Pig production farms with a cattle unit.

Thus, the mixed pig and beef cattle farms and the small dairy farrns with a pig unit have the highest possibility to decrease their pollution risks. Indeed, they can improve their technical and economical performance in reducing organic nitrogen inputs.

Thus, the organic nitrogen production is also an important issue of cattle farming.

❖ Relative impacts of different types of cattle farming

Chate11ier and Vérité (2003) notice that beef cattle farms produce a lower quantity of organic nitrogen than dairy farms (70 kg of organic nitrogen per hectare versus 75 kg of organic nitrogen pcr hectare). This can be explained in one hand, by a lower stocking rate (1.44 UGB/ha versus 1.55 UGB/ha) and in the other hand, by a lower proportion of fodder maize in the main fodder area.

These results assert those obtained by the APEX Scientific Group (1995) in Basse-Normandie. Face-to-face interviews of 146 farmers have been conducted: 72 dairy farms and

74 beef cattle or dual-purpose cattle farms.

Results obtained show that average nitrogen surpluses of beef cattle or dual-purpose cattle farms are lower than nitrogen surpluses of dairy farms (128 kg N/ha/year versus

104 kg N/ha/year). That can be explained by the lower quantity of nitrogen inputs.

Finally, Piot-Lepetit (1998) compares environmental performance of several types of cattle farming in Brittany and Pays de Loire, in 1995.

Thus, the DEA method has been used to analyse the environmental performance of the 393-farm survey selected from the FADN. (see Text box 1):

229 dairy farms;

79 beef cattle farms ;

95 dual-purpose cattle farms.

Results show that inputs can be reduced from 6 % for beef cattle farms to 9 % for dual-purpose cattle farms. So, beef cattle farms seem to be the most technically effective.

However, the share of ineffectiveness due to the use of fertilisers is about 12 % for beef cattle

farms versus 10 % for dual-purpose cattle farms and 15 % for dairy farms. So, dairy farms can the more improve their technical performances by reducing the use of fertilisers.

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Moreover, the share of ineffectiveness due to organic nitrogen is estimated at 5 % for dairy farms and dual-purpose cattle farms whereas it is estimated at 12 % for beef cattle farms. So, beef cattle farms have the highest possibility to reduce organic nitrogen.

Most of the studies deal with the farm pollution risks. However, the different types of farming can also have various positive impacts on environment, particularly on biodiversity and landscape.

1.1.2 Type of farming and supply of biodiversity and landscape

Generally, field crop farming is considered as unfavourable to biodiversity and landscape. Indeed, only 3 to 5 vegetal species cover almost 80 % of farmland (Meynard and al., 2002). This homogeneity of habitats and feed sources for animais is unfavourable to wild fauna, especially since grasslands and forests are scarce in crop areas. Moreover this homogeneity is also unfavourable to landscape.

Besides, chemicals used in field crop farming contribute to reduce fauna and flora on farmland and the surrounding areas.

The problem of fauna and flora poisoned notably by pesticides is also the main concem of fruit arboriculture. However, the negative impacts of this type of farming is very localised. Moreover, fruit arboriculture and viticulture contribute to landscape and have a key role in maintaining biodiversity notably by developing hedges. (Codron and al., 2003).

Finally, Chatellier and Vérité (2003) emphasised the ambivalent role of livestock farming in environment. Indeed, livestock farming may contribute to increase environmental damages ( erosion and so on) in areas with high animal density whereas it may participate in the durability of the terri tory. For instance, we can consider the case of Cotentin marshes where the maintenance of extensive cattle farming has an important role in maintaining the ecological value of the area (Dupraz and Rainelli, 2004).

1.1.3 Type of farming and participation in Aqro-Environmental Schemes

We have to notice that, regarding French AESs, two periods are distinguished.

In the 1992-1999 period, the implementation of the E.U. 2078/92 regulation led to set up two different types of regional schemes and the grassland premium scheme. This latter aimed at maintaining grasslands in promoting extensive livestock farming. It was highly the most important scheme related to the number of participants and also to the part of the French agri-environmental budget (more than 90 %). Thus, most of the participants in AESs were grazing livestock farms.

Indeed, Berthelot and al. (1999) results show that beef cattle farms gather 41 % of the agri-environmental budget whereas goat and sheep farms represent 21 % of the budget and dairy farms 20 %.

In the 1999-2002 period, the E.U. 1257/99 regulation was essentially implemented by the farming territorial contracts. These contracts could paid farmers for the suppl y of much more diversified functions than the grassland premium (maintain of hedges, protection of flora and fauna, and so on). Thus, the farms participating in the policy were also more various.

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The evaluation conducted by the Minister of Agriculture (2003) shows that 49 % of the farms participating in contracts are farms specialised in herbivore farming (sheep, bovines, goats, esquines) whereas these types of farming represent only 37 % of French farms.

The mixed cattle farms ( dairy and beef cattle) have the most important rate of participation (more than 20 %). On the contrary, dairy farms and mixed cropping and livestock farms as well as viticulture farms are less represented among the farms participating in this policy.

To evaluate the relationship between farm characteristics and the supply of non-commodity outputs and externalities, it is important to firstly consider, the type of farming. Indeed, some types of farming are more likely to produce environmental services or other non-market goods at minimum costs.

First, conceming water quality, cereal farms have an important potential of water pollution, generally superior to livestock production. This observation is mainly due to the use of pesticides and nitrates on large areas. However, results show that it is possible to improve technical and environmental effectiveness of farm in reducing the use of fertilisers. (Mollard, 2000).

Pig farming presents also important water pollution risks in more limited areas but with higher nitrogen surpluses per hectare. Indeed, this pollution is due to nitrogen effluents essentially from intensive livestock production in Brittany. (APEX Scientific Group, 1995). The main problem is that the pollution cannot be reduced without decreasing the technical and economical performance of farms. (Le Goffe and al., 1996).

Finally, cattle farms have lower pollution risks than pig farms and the possibility to reduce their organic nitrogen production is quite low.

Dairy farms are generally more polluting than other cattle farms (Chatellier and Verité, 2003) but the Piot-Lepetit study (1998) shows that beef cattle farms have the most important potentiality to reduce nitrogen production and so to improve technical and environmental performances.

Second, conceming production of amenities, herbivore livestock production is generally more favourable to biodiversity and landscape than cereal cropping.

Nonetheless, the supply of positive environmental outputs highly differs among local circumstances and farmers' behaviour.

1.2 Farm size and farm legal statutes

The Piot-Lepetit and al. (2003) study establishes some relationships between farm economic size and pollution risks for farms producing pigs, in France.

Besides, three main studies aim at finding relationships between farm size and the supply of positjve extemalities at regional level:

Avilez Benitez (2001) studies the relationship between farm economic size and management of natural resources in the specific case of Dehesa forests in Andalusia, in Spain.

Callois, Rapey and Vollet (2002) analyse the relationship between farm characteristics, especially farm size, and multifunctionnality in Massif Central (large mountainous region in the middle of France).

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Thenail (2002) establishes a relationship between farm s1ze and bocage structure m Brittany, in Western France.

1.2.1 Farm economic size and impacts on water guality

Among the seven types of farming identified by Piot-Lepetit and al. (2003), (see above), two combinations of systems can give information about the relationship between the economic size of farms and water pollution risks:

small and big crop farms with a pig unit; small and medium dairy farms with a pig unit.

In both cases, the biggest farms are slightly more effective according to the calculated results, but the author does not conclude about the significance of the differences. So no significant relationship can be established between farm economic size and water pollution risks.

1.2.2 Economie viability and management of natural resources

An other study carried out by Avilez Benitez (2001) aims at establishing a relationship between economic farm size and management of natural resources.

This study is located in the South of Spain, in Andalusia. This area is characterised by agro

-sylvopastoral systems with high ecological value. Indeed, the Dehesa forest contributes to produce important environmental functions: protection of soils, animal shelter, limitation of fire risk and so on. This ecological balance depends on the maintenance of extensive livestock production.

The author has interviewed 41 farmers. Then, he has made four models of forest management to establish a relationship between farm viability and the type of management of natural resources:

Problem of natural resources renewal: those farms are characterised by their big size and their good economic results. Farmers are not integrated in the terri tory and most of them live far from the farm.

Conservation of natural resources: those farms have low economic results but maintain natural resources. Their production system is characterised by a high quantity of labour and a good integration in the rural territory.

Sustainable management: those farms have some good economic results. Farmers can modernise their production by developing quality products. No relationship can be established with farm size.

Abandonment of the natural resources: those farms are characterised by a low productivity and low economic results. They are small farms with no perspective of modernisation. The author of this study concludes that management of natural resources is mainly related to farmer behaviour and their integration in the local networks. Once again relationships between economic viability and environmental impacts, depend on local natural and social conditions. It is difficult to derive general results.

Farm economic viability may also be evaluated by using the marginal value of the labour input. For pig production in France, Dupraz (1996) distinguishes two types of farms. The first one is characterised by a labour marginal value which is significantly positive, high nitrogen

surpluses and even a significantly negative effect of animal effluents on crop yields; animal

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second type uses land for on farm animal feed production, animal effluents have a positive impact on crop yields and total nitrogen surpluses are much lower, but the labour marginal value is not significantly different from zero. In the pig production sector higher labour remuneration is clearly correlated with higher nitrogen pollution risks.

Dupraz (2003) also calculated the labour marginal value according to the farm participation in agro-environmental schemes of eight EU countries, taking into account the environmental objective of these schemes. Compared to the non participants, the farms involved in the reduction of intensive farming negative extemalities derive higher labour marginal value while the farms involved in schemes for the maintenance of landscape or the biodiversity protection derive lower labour marginal value. At the EU level, this is a clear indication that intensive farms are more profitable than farms offering opportunities to maintain landscape or biodiversity benefits, as far as AES participation correctly reveal the non commodity outputs of the sampled farms.

1.2.3 Farm size and multifunctionnality

A comprehensive study of the relationship between farm characteristics and the provision of non-commodity outputs and extemalities is carried out by Callois and al.(2002). This study is part of a work aiming at analysing the relationship between public policies and their consequences in the provision of non-commodity outputs and extemalities by farms.

The analysis has been based on data collected in 1997 and related to 135 farms in Massif

Central. The environmental and social impacts of the agricultural production has been

assessed using a set of indicators including:

to analyse the impacts on landscape: landscape openness, diversity of landscape, average size of plots, intensity of hedge maintenance, and so on.

to analyse the impacts on environment: part of the usable agricultural area (UAA) in fodder silage or cereals, livestock stocking rate.

to analyse the impacts on biodiversity: biodiversity related to arable areas, and biodiversity related to forests.

to assess farm participation in rural development: density of farm labourers, direct farm sale activity, processing activity and so on.

The findings can be summarised as follows: ❖ Landscape openness

The largest farms (more than 150 hectares) have the lowest afforestation rate. On the contrary, the smallest farms (less than 50 hectares) have a high afforestation rate (more than 30 %). Farm size clearly favours landscape openness.

❖ Diversity of landscape

The indicator indicates that farm size is negatively correlated with the diversity of landscape. Indeed, large farms are more specialised and had more grassland areas. So, the proportion of arable areas is lower.

Landscape in this area is dominated by grassland, and forest where land is abandoned by agriculture. Hence an higher rate of cropland increases the landscape diversity.

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❖ Maintenance of rural areas

A positive correlation is revealed between farm size and the maintenance of rural areas. Indeed, small and medium farms do not act in favour of hedges maintenance.

❖ Impact of farming practices on environment

Farm size is negatively correlated with arable areas and also with the livestock density. So, small farms present more risks to pollute in this region where largest farms are also the most extensive.

❖ Biodiversity

In this area, biodiversity is higher where the land use is diversified with patchwork of arable, grassy and afforested land. Farm size appear positively negatively correlated with biodiversity. Indeed, biodiversity related to arable lands is particularly important for small farms (less than 50 hectares). No significant finding can be asserted conceming medium and large farms. The same result is observed for biodiversity related to forests.

❖ Rural development

Farm size is positively correlated with the area per farm worker. Hence farm enlargement decreases the human presence in rural landscapes. Besides, no significant relationship can be found between farm size and diversification activities like direct farm sale or on-farm food processing. Hence farm size seems negatively correlated with the human density in some agricultural areas, but there is no clear correlation with rural development.

This first part of the study shows that farm size is positively correlated with:

maintenance of rural areas;

landscape openness; lower pollution risks.

Besides, farm size is negatively correlated with:

diversity of landscape; biodiversity;

human density in some agricultural areas.

So small farms seem to be more favourable to the provision of some amenities and large farms to some others. However, the second part of the study shows that there are counterexamples of these relationships between farm size and multifunctionnality.

Indeed, 12 additional farms were interviewed in 2002 in order to make a typology of farms. Four groups of farms have been therefore identified:

Medium farms ( 80 ha < UAA < 100 ha) with low environmental concerns: these farms do not participate in the maintenance of rural areas and do not apply good practices of fertilisation. The indicators related to landscape and biodiversity are very heterogeneous. Small farms more intensive and also more multifunctional: those farms only include Groupement Agricole d 'Exploitation en Commun that is to say societal farms associating several farmers. Farmers maintain structural landscape elements and were also more aware of environmental issues. Activities of food processing or diversification in green tourism are undertaken.

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Large farms (UAA > 120 ha) not very multifunctional: those farms with heterogeneous economic size do not maintain structural landscape elements. Moreover, the per hectare quantity of fertilisers is high.

Large farms qui te multifunctional: farmers apply fertilisation plans and maintain structural landscape elements.

Even if small farms seem to be more multifunctional, some large farms are also multifunctional whereas some small farms present a low awareness to environmental issues. So, overall no systematic relationship is revealed between farm size and multifunctional characteristics. However for some non-commodity outcomes, correlations are observed and depend on regions or farming types.

For instance in Brittany, a negative correlation between farm size and landscape quality is observed by Thenail (2002).

1.2.4 Farm size and landscape

The study of Thenail (2002) aims at testing the hypothesis of a relationship between landscape and farm characteristics in Brittany. Landscape in this area is characterised by a dense hedge pattern typical from Western France (named bocage) and so, considered as a positive extemality because it is part of the cultural heritage and because it contrais water and nutrient flows while maintaining ecological networks for many flora and fauna species.

A sample of 69 farms, mainly dairy farms, has been made from three study sites chosen along a 10-km long gradient of decreasing hedgerows.

Thenail C. (2002) notices that the farms located in the dense bocage structure are smaller (10

-40 hectares) than the farms located in the open bocage structure (-40 to more than 65 hectares). Moreover, those smaller farms are more fragmented ( 40 to more than 60 fields versus 20-40 fields) and less scattered.

Thus, Thenail (2002) establishes a negative correlation between farm size and the quality of landscape. However, this result is highly related to the characteristics of the Brittany area.

1.2.5 Farm size and participation in Agro-Environmental Schemes (AESs)

In the 1992-1999 period, when AESs were dominated by the grassland premium, participation in AESs was positively correlated with farm area.

Indeed, the average size of the farms participating in AESs is 67 hectares versus 58 hectares for non participants. (Berthelot and al., 1999). However, since participants are mainly extensive cattle producers, their average economic size is much lower than the national standard.

The same positive correlation exists between farm size and participation in recent AESs (MAP AAR, 2003). However, the reasons are different.

Indeed, in the 1999-2002 period, the dominating AESs were implemented through farming territorial contracts. These five-year individualised contracts integrated annual payments for agro-environmental commitments and lump-sum aids for farm investments. Such contracts were difficult to negotiate and to implement because of high transaction costs, especially on the farmer's side. These private transaction costs were entry barriers that discouraged the smallest farmers. Therefore, the farming territorial contracts less reveal the farms with high environmental supply than large farms with investment projects or lower transaction costs.

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The transaction cost effect on AES participation is supported by the fact that corresponding farmers are usually well involved in professional networks (Dupraz and Rainelli, 2004). Thus, 44 % of farms participating in AESs are societal farms whereas those farms represent only 30 % of the total farms in France. Besides, these farms have generally larger farm size. Moreover, large extensive farms localised in livestock production areas are over-represented among farms participating in AESs. Indeed, the uptake the greatest (17.4 %) concerns farms larger than 200 hectares.

No general relationship is revealed between farm area and the provision of non-cornmodity outputs and externalities. However intensive farming that threatens environment with nitrogen and pesticide pollution is more profitable than farms providing landscape and biodiversity benefits (Dupraz, 2003). Moreover within the pig production sector, there is a trade off between farm labour remuneration and practices that reduce nitrogen pollution risks (Dupraz, 1996).

Thenail (2002) shows that small farms are more favourable to the maintain of the bocage landscape and therefore to biodiversity. However, the farms participating in AESs are mainly medium and large farms. (Berthelot and al., 1999; MAPAAR, 2003). This result does not prove that the smallest farms do not supply positive externalities and non-cornmodity outputs but reveals that medium and large farms are likely to participate in AESs for other reasons. The authors emphasise the importance of local circumstances. (Callois and al., 2002; A vilez Benitez, 2001 ). Thus, policy should take into account natural circumstances and local social

and economic stakes.

1.3 Conventional farming versus organic farming

Numerous studies compare environmental impacts of organic and conventional farming.

The APEX scientific group (1996) compares nitrogen surpluses of organic and conventional farms in Basse-Normandie, in North-western France.

Bourdais (1998) analyses a set of environmental impacts of organic farming compared to conventional farming for several types of farming in Aquitaine, in South-western France. Freyer B. and al. ( 1996) compare a set of agri-environmental indicators of different modes of production in Switzerland.

Basset-Mens and Van Der Werf (2004) evaluate environmental impacts of organic pig production compared to conventional pig production in Brittany.

1.3.1 Comparison of organic and conventional farming in Basse-Normandie

The APEX Scientific Group (1996) compares three different modes of production to assess nitrogen pollution risks in Basse-Normandie Region.

The 146 cattle farms interviewed have been classified according to mode of production: organic farms;

farms with reduced-use of agri-inputs; conventional farms.

It is shown that organic farms have very low nitrogen surpluses (6 kg N/ha/year for dairy farms and 0 kg N/ha/year for beef cattle farms or dual purpose cattle farms) whereas other farms present nitrogen surpluses superior to 100 kg N/ha/year.

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So, the au th ors emphasise the low polluting potential of organic farms.

1.3.2 Comparison of orqanic and conventional farminq in Aquitaine

Bourdais (1998) makes a comprehensive work aiming at evaluating environmental impacts of organic farming compared to conventional farming, taking into account the diversity of types of farming. A survey of 80 farms (40 organic farms and 40 conventional farms) has been made in Aquitaine.

Three environmental components have been considered thanks to the analysis of indicators: Water quality: nitrogen balance, nitrate pollution risks, phosphorus balance, crop protection method;

Soil fertility: biological soil fertility and physical soil fertility; Biodiversity and natural resource management.

All these indicators have been evaluated by a score between O and 1 O. The more the farming practices are favourable to environment, the higher the scores.

Organic and conventional farming are compared for the main types of farming in Aquitaine: Annual cropping (vegetable and cereal cropping);

Perennial cropping (viticulture and fruit arboriculture); Mixed cropping and livestock.

❖ Water quality

Organic farm scores for crop protection method are very good. Indeed, organic farms do not use chemicals pesticides and so, make weed and disease control by combination of various methods including choice of resistant species, long and diversified crop rotations and use of techniques like harrowing, hoeing or mechanical weeding. Only two organic farms have score under 7 for using natural pesticides rotenone-based.

Conventional farming have lower score for all types of farming. The difference is greater for fruit arboriculture and viticulture because those perennial crops are generally treated 7 and 8 times a year.

Moreover, organic farm scores related to nitrogen balance are between 8 and l O. So, water nitrogen pollution risks are very low for organic farming.

Conventional farm scores are more heterogeneous. Indeed, mixed cropping and livestock farms present important average nitrogen surpluses, whereas viticulture farms have scores close to 1 O. The larger differences between organic farming and conventional farming concerns cereal farms and mixed cropping and livestock farms.

This difference is explained by the replacement of minera! fertilisers used in conventional farming by application of organic matter ( compost of animal manure, livestock effluent) to maintain soil fertility in organic farming.

The indicator of nitrate pollution risks asserts the following results: organic farming does not induce important nitrate pollution risks;

the larger differences between organic farming and conventional farming concern cereal farms and mixed cropping and livestock farms.

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❖ Soi! fertility

Overall, potential impacts of organic farming on biological soi! fertility are more favourable than conventional farming. This result is particularly marked for vegetable cropping. However, viticulture is an exception to this observation because of the use of brass in fungicide control even in organic farms.

❖ Biodiversity and natural resource management Concerning biodiversity, two cases are identified:

Organic mixed cropping and livestock farms and organic vegetable cropping farms have a very better impact on biodiversity than conventional farming. This is explained on one hand, by the higher number of crop species, and on the other hand, by the maintenance of structural landscape elements as hedges.

There is no significant difference between organic and conventional farming for viticulture, cereal cropping and fruit arboriculture.

Moreover, organic farming is considered as more favourable to natural resources than conventional farming. Again, difference observed in viticulture is quite low whereas in other types of farming, organic farm scores are double in average than conventional farm scores.

To conclude, it is revealed that organic farming bas generally better environmental impacts than conventional farming. This observation is especially marked for two types of farming: vegetable cropping, and mixed cropping and livestock farming.

Nevertheless, results are heterogeneous. Indeed, the author emphasises that first, organic viticulture farming is not more favourable to environment than conventional farming. Second, even if nitrate pollution risks are very low in organic farming, two organic farms present important surpluses of organic matter.

Those results obtained from very localised data can be compared to those of the study designed by Freyer B. and al (1996) in Switzerland.

1 .3.3 Comparison of orqanic and conventional farminq in Switzerland

This study (Freyer B. and al, 1996) aims at defining and implementing environment-friendly agricultural practices in Switzerland. The objective is, on one hand, to present the evolution of agricultural practices from 1991 to 1996 and on the other hand, to compare three modes of production: organic farming, ecological farrning and conventional farming. Ecological farrning encompasses the farms participating in ecological programmes.

This evaluation has been made by estimating a set of agri-environmental indicators: Water pollution: nitrogen balance, reduction of pesticides;

Soil conservation and nitrate leaching: an indicator is estimated depending on the winter and spring crops sown in farmlands. Ecological farming prescriptions impose a minimum score of 50 points.

Biodiversity: rate of ecological areas among usable agricultural area (UAA), average number of crops per farm.

Animal protection: rate of farms involved in the Swiss national programme aiming at improving the animal welfare.

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The organic farms have a negative average nitrogen balance whereas conventional farms present nitrogen surpluses. Ecological farms are quite balanced especially when they have begun ecological programmes in 1993.

❖ Soil conservation and nitrate leaching.

This indicator is higher for organic farms (61 points) than for ecological farms (58 points) and

conventional farms (52 points).

❖ Biodiversity.

The author considers that the implementation of ecological areas contributes to diversify agricultural landscape and to promote flora and fauna. He notices that the proportion of ecological areas is superior in organic farms (12 % to 14 % of UAA) than in ecological farms (8 % to 10 %) and conventional farms (4 %).

In the same way, organic and ecological farms have more diversified crops than conventional ones.

❖ Animal welfare.

Organic farms seem to be more aware of animal welfare issues. Indeed, 91 % of organic farms participate in the Swiss national programme aiming at improving the animal welfare whereas

51 % of ecological farms and only 21 % of conventional participate in this programme.

Ali the calculated indicators show better environmental impacts for organic farming than conventional farming.

These three previous studies were set up at the farm level. However, even if organic farming seems to be more respectful of the environment, this mode of production has a lower

productivity. So, it is interesting in considering agri-environmental indicators calculated per hectare or per kilo gram of products to evaluate environmental impacts. Basset-Mens and Van Der Werf (2004) used these types of indicators to evaluate environmental impacts of different modes of pig production, and results are not as obvious as previous ones.

1.3.4 Comparison of organic and conventional farming for pig production in Brittany

Basset-Mens and Van Der Werf (2004) use the life cycle analysis to evaluate environmental impacts of pig farming in Brittany.

This method is based on the inventory of all resource uses and emissions that are realised from the production to the consumption of a particular good: extraction and processing of raw materials, production and using, wasting and/or recycling. However, this study is restricted to production activities.

Three modes of production have been compared: conventional production;

quality label production; organic production.

Environmental impacts analysed in this study are: eutrophication (in kg PO₄-eq); climate change (in kg CO2-eq); acidification (in kg SO2-eq); soi! toxicity because of heavy metals storage, energy using, area using, pesticides using.

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Considering results obtained per hectare, organic farming presents lower impacts on environment for eutrophication, and soil acidification. Moreover, organic farming uses lower

quantity of pesticides and energy. However, similar impacts with conventional farming are

observed on climate change and soil toxicity.

However, organic pig productivity is lower of about 45 % than conventional productivity. So indicators calculated per kilo gram of produced pig are very different:

A lower quantity of pesticides is used in organic farming but eutrophication and soil

acidification are similar in both organic and conventional farming. Moreover, organic farming has greater impacts on climate change and soil toxicity. Besides, it is observed that organic farming uses more energy and surface area to produce the same quantity of pig.

These last observations show that organic farming cannot be considered as the answer to environmental impacts of agriculture. Organic farming is revealed to be less favourable to environment to produce the same quantity of agricultural outputs because of its lower productivity.

In sum, it is observed that organic farming has lower risk of nitrogen pollution than conventional farming especially for cereal cropping and mixed cropping and livestock farming. (Bourdais, 1998)

Moreover, organic farms apply more environment-friendly practices: maintenance of hedges,

maintenance of ecological areas, and so on. (Bourdais, 1998; Freyer B. and al., 1996).

However, the low productivity of organic farming has to be taken into account. Indeed, environmental impacts of organic farming estimated by unit of product are similar or greater than those of convcntional fam1ing. (Basset-Mens and Van Der Werf, 2004).

1.4 Intensive versus extensive farming.

To compare the pollution risks of intensive farming and extensive farming, two main studies are analysed:

The APEX Scientific Group (1995) establishes relationships between production intensity of dairy farms and nitrogen surpluses in Basse-Normandie.

Piot-Lepetit and Le Moing (2000) design relationships between characteristics of dairy

farms, especially production intensity, and nitrogen surpluses.

Moreover, Thenail (2002) establishes a relationship between production intensity and quality of landscape in Brittany.

1.4.1 Farming intensity and impacts on water quality

The APEX Scientific Group (1995) sets up a relationship between farm characteristics and

nitrogen surpluses thanks to data available about farms of western France.

Indeed, estimated nitrogen surpluses are very different depending on the region: nitrogen surpluses of Basse-Normandie farms are generally lower than nitrogen surpluses of Brittany and Pays de Loire farms.

To explain these results, characteristics of farms in Basse-Normandie and in Brittany and Pays de Loire have been compared:

Average farm UAA is greater in Basse-Normandie.

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Average milk production per cow is lower. Stocking rate is lower.

A positive correlation between farming intensity and nitrogen surpluses seems to become apparent.

However, to statistically explain the variability of the results, two indicators of intensity have been used:

Stocking rate (LU per hectare of main fodder area);

Annual milk production (milk litres produced per hectare of main fodder area and per

year);

It is finally observed that nitrogen surpluses tend to increase when stocking rate increases but this relationship is not very significant. Indeed, for a fixed stocking rate, nitrogen surpluses can vary a lot.

In the particular case of dairy farms, nitrogen surpluses seem to be linked with annual milk production. However, a big variability of the results is noticed.

The statistical comparison of data from different regions is misleading because of the

variations in climate and soil characteristics. lndeed, the impacts of farming practices highly

depends on soi! characteristics and climatic conditions (Boiffin and Stengel, 2000).

The same comment can be associated to the Piot-Lepetit and Le Maing study (2000). Indeed, the authors evaluate farm environmental effectiveness of French dairy farms without taking into account their soil characteristics and climatic conditions. Therefore, soil and climatic

differences probably exp Iain a lot of the environmental effectiveness variability.

According to the authors, farm nitrogen surpluses can be explained by a non effective use of inputs during the cycle of production. As a consequence, it is necessary to evaluate farm

effectiveness in managing inputs to evaluate farm pollution risks.

The DEA approach (see above) has been used to measure effectiveness of 166 dairy farms of

F ADN. Three types of effectiveness have been evaluated : technical effectiveness, and farm performance relative to fertilisers and nitrogen management. Then, various analyses of

variance and the Kruskal-Wallis test have been used to establish relationship between farm

characteristics and farm effectiveness.

Results show relationships between production intensity and farm effectiveness: The greater the gross incarne per hectare is, the more effective the farm. The greater the stocking rate (LU/ha) is, the more effective farm.

The greater the quantity of organic nitrogen is applied per hectare, the more farm technically effective. The same relationship is established with the farm effectiveness to

manage fertilisers. However, the most effective farms in the management of organic

nitrogen are those which apply medium quantity of organic nitrogen per hectare.

The greater the quantity of fertilisers bought per hectare is, the lower technically effective farm is. However, the most effective farms in terms of organic management are those that buy medium quantity of fertilisers per hectare.

The farm typology related to performance scores shows that the most effective farms are also

the most intensive (gross incarne per hectare superior to 2,300 €; and stocking rate superior to

1.4 LU/ha). Moreover, the least effective farms have the lowest stocking rate (inferior to 1.4). Medium score farms are more difficult to characterise.

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The impact of intensification in environment is clearly harmful, especially for chemical crop protection and fertilisation. However, the impact of the intensive practices highly depends on soil and climatic conditions. In addition practices are likely to be more intensive when these conditions are good, because intensive practices are usually Jess

profitable if applied in bad conditions. Hence, statistical comparison of cross-section

data are often misleading or not clear-cut because they compare different farming practices associated with different soil characteristics and climatic conditions.

Very negative impacts occur when intensive practices are applied on poor and fragile soils, while even more intensive practices have lower impacts when they are applied on well-structured and deep soils (Boiffin and Stengel, 2000). In the EU, and in France in particular, spread of intensive practices on poor soils follows the increase in arable land. It was favoured by the price support of cereals and oil seeds. This public support of arable crops has been continued since 1992 with the partially coupled direct payments which also benefit to silage maize in animal farms. During this long period, the increase in arable crop areas benefits from streamlined intensive practices, characterised by the input cooperation between high fertilisation and high crop protection by pesticides. Recently, low input practices are becoming more profitable because of the decrease in EU crop prices but their implementation need new skills and adaptation efforts from farmers (Meynard et al., 2002).

Intensive farming is potentially more polluting than extensive production. Moreover, Thenail (2002) shows that intensive farming has also negative impact on landscape and consequently on biodiversity.

1.4.2 Farminq intensity and landscape

Thenail (2002) has used a statistical method based on the multiple correspondencc analyses to correlate the farm characteristics to their allocation along the bocage gradient.

The 69-farm survey is dominated by dairy production with maize, cereals and grassland. The results reveal that the dense bocage structure is characterised by a predominance of very specialised dairy farms, with more long duration than short duration sown grassland, and a small proportion of grain maize. Beside maize silage, the contribution of grass fodder (hay and silage) is significantly important in the livestock food. The livestock management in

pasture is characterised by the presence of lots with mixed dairy heifers, or even mixed dairy and meat cattle. Moreover, the equipment and labour force for the main field activities corne from a diversity of sources apart from the farm itself: agricultural contractors, neighbours or other informai social networks, in majority.

On the contrary, the open part of the bocage gradient is characterised by a predominance of dairy farms with diversified cropping and livestock productions, such as pigs and poultry or cattle livestock like bull calves. A high proportion of maize silage and cereal grains characterise the livestock food. Moreover, these farmers call more on extemal technical support for artificial insemination and milk recording. In this group are also found the farms that cal! the most for co-operative machine pools.

The bocage gradient of intermediate structure forms a final group characterised by the diversity of the associated production systems. Indeed, they included dairy farms, but also cropping farms and/or other livestock farms.

So, it is found that the more intensive the farms are, the Jess dense the bocage structure is. Hence, the dairy farms located in the dense bocage structure are characterised by a lower productivity (3,000-5,000 litres a year per cow) than the farms located in the open bocage structure (5,000-6,000 litres a year per cow).

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The author concludes that the negative impact of intensive farming on bocage has also negative impacts on biodiversity. Nevertheless, if the bocage patterns looks environmentally better, the quality of the management of very small fields is limited by the use of non-adapted machinery. This of course is also constraining, regarding work organisation and costs.

lt is clear that water pollution risks increase when more intensive farming practices are applied (The APEX Scientific Group, 1995). However, the impact of intensification on water quality highly depends on local conditions: notably soil characteristics and rainfall.

Besides, intensive farming induces negative impact on landscape especially in Western France where the typical landscape is characterised by the bocage pattern (Thenail, 2002). So, environmental impact of intensive production depends mainly on local circurnstances. Very negative impacts occur when intensive practices are applied on poor and fragile soils, while even more intensive practices may have lower impacts when they are applied on well -structured and deep soils (Boiffin and Stengel, 2000).

Moreover, as organic farming, the lower productivity of extensive farming has to be taken into account.

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2 Characteristics of the farmer.

No specific study deals with the relationship between farmer characteristics and the supply and non-commodity outputs and extemalities. However, some previous quoted authors sometimes consider these characteristics to explain their results.

2.1 Education and knowledge of the farmer.

Piot-Lepetit and Le Moing (2000) in their dairy farm survey do not find significant

relationship between education and knowledge of the farmers and environmental

effectiveness.

However, Meynard and al. (2002) notice that education level can have a significant impact on farmers' environmental behaviour and attitudes. Thus, they quote a 1,638 farmer survey conducted in eight European countries in 1998 that allowed to assess the influence of general and agricultural education in the farmers' willingness to adopt agri-environmental schemes. This study shows that farmers with the lowest level of agricultural education (less than one year) and general education (less than eight years) are not willing to participate in agri-environrnental schemes. In other words, minimum agricultural and general education

seems to lead farmers to adopt environment-friendly practices. Moreover, the

propensity to apply several environmental prescriptions increases with the level of

general education. However, the level of vocational training in farming does not influence

farmers' behaviour in a significant way. So the agricultural education does not seem to encourage farmers to adopt specific environment-friendly practices.

A vilez Benitez (2001) in her study about the management of natural resources in Andalusia

notices that the level of integration in the territory network (relationships with other

stakeholders) is an important determinant of farmers' environmental behaviour. This is

also noticed by MAP AAR (2003) which concludes that the best integrated farmers are more likely to participate in AESs.

The environmental awareness of farmers is a very significant explanatory variable of

their participation in AESs. It was initially measured on Belgian farms (Dupraz et al., 2000)

and confirmed afterwards at the EU level on other and larger samples (Dupraz, 2003).

2.2 Age of the farmer.

2.2.1 Relationship between age of the farmer and environment.

Le Goffe and al.(1996) find that the most effective pig farmers are also the youngest and the best educated. However they emphasise that conceming mixed livestock, mainly grazing

livestock farms, farmer age does not explain the level of effectiveness. So the relationship

between farmer age and farm environmental performance does not seem to be significant. Besides, Piot-Lepetit and Le Moing (2000) show that no significant relationship between age of the farmer and farm effectiveness can be set up for dairy farmers.

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Callois and al.(2002) notice that youngest formers are generally less aware of landscape issues. However, the 135 form data survey does not allow to conclude about the significance of this observation.

2.2.2 Participation in AESs.

Before 1999, the former's age was negatively correlated with the part1c1pation in AESs reducing the negatives externalities of intensive farming and positively correlated with formers AESs with landscape or biodiversity objectives (Dupraz, 2003).

In France, the formers participating in forming territorial contracts were more experienced. Indeed, 57 % of participants were settled in for 12 years and more. (MAAPAR, 2003).

Moreover, most of the farmers participating in AESs are between 40 and 50 year old. However, these results are not really significant because only individual forms can be taken into account whereas most of the forms participating in forming territorial contracts were

societal forms.

Clearly general education enables the adoption of environmentally friendly practices and fovours environmentally friendly attitudes. This is not yet the case with agricultural education. AU other things equal, the persona! environmental awareness of the former is also important. It is enhanced by local networks or formers' groups that fovours the efficient implementation of environmentally friendly practices. In general terms, age does not matter per se. Younger former have a better attitude towards environment because they have higher general education on average. When these effects are disentangled, it seems that younger formers devote more

importance to the reduction of pollution than to landscape or biodiversity issues. This might be explained by their willingness to adapt their form to more and more constraining environmental standards in agriculture, while we already noticed that the provision of landscape and biodiversity benefits does not make the farms much profitable for the time being.

However, formers' characteristics are not significant for explaining the provision of non-commodity outputs and externalities in ail related studies.

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