The agri-environmental schemes (AESs) of the European Union employ the highest share of the public budget allocated to rural development programs. Our study applies a difference-indifferences propensity score matching estimator to perform a comparative analysis of the effects of these schemes on farmers’ performance across five E.U. member states. The effects of the AESs adoption largely depend on the share of the agri-environmental payment on farm revenue. If this share is larger than 5%, participation in AESs is effective in promoting greener farming practices in all countries but Spain, where a negative effect on farm income is also shown. (JEL Q15, Q18)
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Arata et al. (2016) studied this question.