Participation in set aside: What determines the opting in price?

D. Roberts, J. Froud, R. W. Fraser

    Research output: Contribution to journalArticle

    12 Citations (Scopus)

    Abstract

    This paper analyses the decision facing Community farmers of whether or not to participate in the voluntary rotational set aside scheme. For each individual producer, an "indifference price" for cereals can be identified at which the expected profit from either opting in or out of the scheme is identical. An expected utility model is used to investigate the influence of various factors on the level of indifference price and hence the uptake of set aside. Empirical analysis, based on FBS farm level data, suggests that this price is relatively insensitive to the uncertainty faced by the farmer and the farmer's attitude to risk. It is, however, sensitive both to the key policy variables and to the farm's cost structure and yield. The results presented help explain the initial high take up of set aside in England.

    Original languageEnglish
    Pages (from-to)89-98
    Number of pages10
    JournalJournal of Agricultural Economics
    Volume47
    Issue number1-4
    DOIs
    Publication statusPublished - 31 Jan 1996

    Keywords

    • Farming
    • Crop Rotation

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