Multi-stage linear programming model for optimizing cropping plan decisions under the new Common Agricultural Policy

Abstract

The new European Union’s Common Agricultural Policy will cover the period from 2015 to 2020. Significant novelties in the payment scheme have been introduced which may potentially encourage farmers to implement changes at the farm level by meeting certain environmental requirements in return for support payments. The mandatory requirements, commonly known as ‘greening rules’, consist of crop diversification, maintenance of permanent grassland and establishment of an ecological focus area. This paper presents a decision-support tool based on a multi-stage linear programming model that identifies optimal cropping plan decisions under the new Common Agricultural Policy. The capabilities of our tool are illustrated through its application to the Spanish agricultural regions. Our method identifies the optimal cropping plan (i.e., crops to be grown and their acreage each year during the reform horizon) that maximizes the farmer’s net return in each region. Furthermore, the model can also be used to calculate the minimum subsidy value that would make the implementation of greening rules economically appealing, thereby promoting the widespread adoption of more sustainable agricultural practises.