Environmental subsidies and farm economic and environmental performance

The Common Agricultural Policy (CAP) has broadly two main groups of subsidies: Income support and rural development support. Under the new CAP, there is the introduction of schemes that promote environmental protection, animal protection welfare, and climate change adaptation. These schemes will be funded by Member States' budgets devoted to income support. Agricultural subsidies influence both farm income and farm competitiveness. While research on the effects of subsidies on the income of different farmers and the competitiveness of their farms is not new, quantification of environmental performance associated with environmental payments has received limited academic attention. We analyse the relationship between the Green Low-Carbon Agri-Environment Scheme (GLAS) and environmental and competitiveness outcomes. GLAS is the main agri-environment scheme in Ireland that has been designed to promote more sustainable production practices.