We estimate a risk-based programming, individual farm model and apply it to study the wealth effects of crop-related, decoupled direct payments under the European Union (EU) Common Agricultural Policy. The model expands on previous work on estimating risk-based programming models by applying a robust Bayesian econometric framework. The results indicate that the wealth effect varies greatly between individual farms, but that its impact on aggregate crop production is small. For larger farms, in particular, removing the decoupled payments, while keeping total land constant, increases the diversity of the cropping plan.

In this study, quantitative models of the agricultural sector and nutrient transport and cycling are used to analyse the impacts in the Baltic Sea of replacing the current Greening measures of the EU's Common Agricultural Policy with a package of investments in manure handling. The investments aim at improving nutrient utilization and reducing nitrogen leaching, based on the assumption that lagging farms and regions can catch up with observed good practice. Our results indicate that such investments could reduce nitrogen surpluses in agriculture by 18% and nitrogen concentrations in the Baltic Sea by 1 to 9% depending on the basin. The Greening measures, in contrast, are found to actually increase nitrogen leaching.