| dc.description.abstracteng | The Common Agricultural Policy (CAP) shapes the agri-food sector of the European Union (EU) by mainly regulating the distribution of financial support to agricultural producers. Based on the Treaty of Rome (1957), one of the CAP's objectives is to "ensure a fair living standard for farm-ers" by increasing the individual earnings of farmers and agricultural employees engaged in agri-culture. Since its interception, the CAP has undergone several reforms and has become one of the EU's most regulated and controversial policies. One of the most criticized components of the CAP is the direct payment scheme. Since 2005, the CAP has provided income support for farm-ers through (decoupled) direct payments paid on the amount of cultivated land (in hectares). These payments are intended to stabilize agricultural incomes and ensure the long-term econom-ic viability of farms. The criticism of the direct payment scheme is directed at its large budget and the ineffective design of income policy instruments.
The European Commission still justifies the continuation of income support by arguing that farmers' incomes remain below the economy's average income, taking only revenues gained from agricultural activity into account. But, increasingly, farms are characterized by multiple income sources and are highly heterogeneous in farm structures ('complex farms'). This calls for considering the farm household income as it comprises both farm and non-farm incomes that would be a better indicator to assess farmers' living standards. Yet, several studies on the so-called "farm income problem" in agriculture have shown that the income disparity between farm and non-farm households is diminishing in the EU. However, the household's income captures only a part of farmers' living standards. Wealth data can also shed light on inequality and stabil-ity issues. Yet, approaches contributing to this topic and highlighting the importance of the farm households' income and wealth are still scarce.
In addition, income support payments are conditional on basic agricultural and ecological stand-ards, and farmers must comply with receiving direct payments. Over the years, income support has become increasingly multifunctional, associated with environmental goals and public provi-sion services that will be even stronger with the new CAP reform (2023-2027). Farmers will then face changes in the direct payment scheme, for instance, a reduction of the direct payments per hectare and implementation of more performance-based payments, including higher environ-mental standards for farmers to receive income support. In this context, farmers have expressed their growing concerns about income policy design through protests in Germany and other Euro-pean countries. As key stakeholders in the CAP, farmers play an essential role in the perfor-mance of the CAPs' instruments by rejecting or applying measures on the farm level. Farmers' decision-making is influenced by behavioral factors, e.g., farmers' attitudes, perceptions, and farmer identity, affecting their behavior on and off the farm. Promoting ecological practices and increasing the uptake of ecological approaches is intrinsic to the success of environmental poli-cies, but this is contingent on farmers' acceptability of these practices. Policy change thus cannot be executed without a comprehensive understanding of farmer needs and drivers underlying farmers' behavior.
Therefore, this thesis looks at income support in German agriculture. It comprises three studies, providing valuable insights into farmers' economic well-being, their perspectives on direct pay-ments, and environmental behavior. These findings are helpful for policymakers and policy design regarding 1) the improvement of data availability, 2) farmers' response and adjustment to policy change related to income support payments, and 3) farmer decision-making on the farm regarding adopting environmentally-friendly farming practices.
The present dissertation, consisting of five chapters, is organized as follows: Chapter 1 presents an introductory overview of farm income policy and the criticism of direct payments. It then outlines research gaps and objectives.
Chapter 2 provides an empirical analysis by applying an indicator that combines households' disposable income and net wealth consisting of financial assets and real estate using the Income and Consumption Survey (2018). The results reveal that the income available to farm house-holds can support a standard of living equal to that of non-farm (employed) households. As-sessing farm households' economic well-being means paying attention to their farm assets be-cause they are highly intertwined with the household. Wealth affects households' economic well-being in both directions: farm households and workers/employees would be better off (wealthier) if only their household income would assess their financial status. The opposite trend occurs for unemployed and pensioners/retirees. Our analysis further indicates that there is cur-rently a lack of statistical data to assess achieving a fair standard of living for the agricultural community. To derive agricultural policy implications, the Income and Consumption Survey misses farm characteristics and a reliable number of farmers' observations to determine their economic well-being over time.
Chapter 3 presents German farmers' attitudes toward the future of direct payments and their un-derstanding of decoupled payments. The study employs a survey of 435 farmers collected from January to February 2021. Using cluster analysis and quantitative content analysis, we identified three distinct groups of farmers: (1) The "Independents" (n=185) are entrepreneurs and have a competitive mindset. The abolishment of direct payments is perceived as independence from policy conditions. (2) The "Conservatives" (n=117) advocate an income policy based on direct payments, and they reject higher environmental standards. (3) The "Environmentalists" (n=131) emphasize a pronounced environmental awareness, favoring an environmentally performance-based approach. All clusters criticize the design of income support payments, and a wish for change is widespread, but from different perspectives. From a policy perspective, a more differ-entiated design of policy instruments and longer transformation periods are needed to engage farmers in policy change.
Chapter 4 addresses farmers' environmental behavior. How farmers see themselves and want to be perceived by others has gained attention as a driver of adopting environmentally-friendly farming practices. However, there has been little examination of farmer identity's effect on par-ticipation in conditional schemes using regression analysis, particularly for Germany. Therefore, we provide a comprehensive sample of 441 German farmers to examine farmers' environmental behavior based on their identity, socio-demographic and farm characteristics. First, we apply Principal Component Analysis to identify groups of farmers' identities. We then use two regres-sion models to compare the effect of farmer identity on participation in Agri-Environmental Measures and Greening. The results reveal three farmer identity groups. Only the 'environmen-talist' and 'productivist' identities positively influence farmers' participation in voluntary measures, while the productivist identity also affects farmers' involvement in Greening.
Chapter 5 presents the main findings of the previous chapters and draws overall conclusions. The thesis's conclusions can be summarized as follows: First, the results support the observation that farmer' living standard is similar to those of non-farm households, and the related farm in-come policies are losing relevance in Germany. Second, data limitations on farm households' income and wealth may lead to misleading policy conclusions and prevent the differentiation between the poor and the non-poor. Therefore, better and more robust data sources are needed to target income support effectively for those in need and with the lowest living standard. Third, farmers with a conservative mindset show low ecological ambitions and highly criticize imple-menting higher environmental standards conditional to income support. These farmers need to rethink their thought patterns and behavior to meet the changing requirements for multifunction-al agriculture. Lastly, farmer identity considerably affects farmers' environmental behavior. Un-derstanding farmer identity would help to motivate farmers to act pro-environmentally as the way they perceive themselves in relation to their occupation considerably affects farmers' be-havior. Hence, engaging or even increasing farmers' commitment to policy change toward more environmentally oriented policies requires a more differentiated design of policy interventions that allow flexibility on the farm level and account for the heterogeneous conditions of farmers' scope of action. | de |