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Article

Results of Implementing Less-Favoured Area Subsidies in the 2014–2020 Time Frame: Are the Measures of Environmental Concern Complementary?

by
Jana Poláková
* and
Josef Soukup
Department of Agroecology and Crop Production, Faculty of Agrobiology, Food and Natural Resources, Czech University of Life Sciences Prague, 16500 Prague, Czech Republic
*
Author to whom correspondence should be addressed.
Sustainability 2020, 12(24), 10534; https://doi.org/10.3390/su122410534
Submission received: 18 November 2020 / Revised: 4 December 2020 / Accepted: 10 December 2020 / Published: 16 December 2020
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Abstract

:
This article collated and interpreted data on land-based measures and capital investments support in Central Europe. Data collection is essential, due to more EU funds being distributed after 2020. Most evaluations focus on outcomes of agri-environmental measures within the most populous Member States. Unlike previous work, empirical data was hereby assessed on the public support of three measures of environmental concern to farmers (less favored area measure, capital investments, and agri-environmental measures). The study examined whether public goods are complementary. A prevailing focus was on spending for the farms in less favored areas, now renamed Areas of Natural Constraint (ANC). Cluster analysis was employed for seven countries out of 105 rural development programs (RDPs). The Countries include Austria, Czech Republic, Germany, Hungary, Poland, Slovakia, and Slovenia. The average share of the wider ANC measures was 0.31 of the total public funds. Within Central Europe, Hungary sets aside the smallest share (0.17), whereas the Czech Republic and Austria introduced a slightly larger share (0.51). All RDPs identified Capital Investments in physical assets as one of the significant measures. The study found that public goods for biodiversity and landscapes were entailed in the ANC measures, although the extent of measure complementarity across all regions will require further investigation. Finally, unresolved questions about expenditure are highlighted.

1. Introduction

For several decades, rural community economics in Europe have been discussed in terms of public goods. One may wonder: is this terminology synonymous with the environmental concerns of taxpayers? The answer is that public goods are non-rivalrous and non-excludable to those concerns.
The theory of public goods rests on a library of advocates and critics, referring to Karl Polanyi’s work. Granovetter shrewdly observed: “Where groups attach great value to skill, it can become an eagerly sought-after status currency [1].” With each critic, inevitably public goods became entangled in the discussion of the binary of public–private attainment. Therefore, “public goods” has been a contested term [2]. A large body of work [3,4,5,6,7,8,9,10,11,12,13,14,15,16] revolved around the impetus to define the term for budgets addressing environmental concerns of taxpayers. In each workpiece, the definition of public goods inevitably began with the recognition that these goods embrace the non-rivalrous and non-excludable aspects. Public goods, in practice, broadly encompass many environmental assets associated with agriculture and valued by society (landscapes, farmland biodiversity, water quality, soil functionality, rural viability, animal welfare, and aspects of food security). Ever since the seminal rural development reform of the EU budget began in 2003/2004, public goods have helped to provide clarity in the aims of rural policy and its expenditure. Clearly defined public goods help to distinguish when state intervention can incentivize production of certain goods and services (landscapes, farmland biodiversity, water quality, soil functionality, rural viability, animal welfare, and aspects of food security). Public goods are thus an essential service to ascertain the utility of subsidy. In turn, public goods are also used in legal negotiation of the budget rubrics to clarify the aims of potential budget measures. Doing so prevents issues of transaction costs, as scrutinized by the opponents of Polanyi and Granovetter [17,18].
The Areas with Natural Constraint (ANC) measure, formerly known as Less Favored Areas, is a subsidy available to EU farmers who produce food, feed, and fibre from extensive cropland, grazing land, and permanent crops. The overall goal of ANC is to compensate farmers who perform agriculture in disadvantaged conditions. Depending on biophysical and climatic conditions less advantageous for agriculture, such a subsidy to production of public goods may be considered as purpose outshining the economic criteria. Many evaluations exist, so far, on national or regional scales [19,20,21,22,23,24,25,26,27,28]. Introduced by Council Regulation (EC) No. 1257/1999, there are three basic categories of ANC measures—the agri-environmental measure (ANC1), capital investment support (ANC2) and a simple measure based on a flat-rate per hectare (ANC3). The category of ANC1 is a key part of the overall ANC aims, as it subsidizes farmers who adopt a targeted set of land management practices to benefit landscapes and farmland biodiversity. The simple ANC3 measure supporting farms in ANC areas has a uniform approach based on the ANC definition, having excellent results for farm economics in disadvantaged territories, however being judged equivocal for public goods [4,24,25,28,29]. Each Member State (MS) has developed their own strategy to implement ANC measures in their country and may favor certain categories. The majority of rural development programs (RDPs) choose to implement all three categories of the ANC measure. While several studies have particularly focused on ANC1, the extent of public goods achieved through ANC measures, as a whole, has been inadequately examined. Furthermore, market competitiveness (ANC2) is equally important in Central Europe and should not be compromised in absence of public goods.
The objective of this study was (1) to examine the relative weight of the three categories (ANC1: agri-environmental, ANC2: capital investment, and ANC3: supporting farms through a simple ANC hectare subsidy that continues the former Less Favored Area subsidy) in support of the overall ANC goal in Central Europe, and (2) to determine how and to what extent these measures are used by a group of Central European MS in land-based support. Such reflective research is indispensable if we strive to implement complementary measures. Complementarity determines the interpretation of sustainability outcomes when reviewing the measures in the 2014–2020 timeframe. Without complementarity, these measures may have a cancelation effect in effort to create public goods.
The public goods focused on in this study were only biodiversity, landscapes, precision agriculture, and soil protection to extend the vigorous discussion on public goods being “group norms and cultures which also shape skill and productivity” [1,18].
This study assessed 105 rural development programmes, focusing on seven Central European programs directly affecting the Czech Republic. The key finding suggests that the ANC subsidy (ANC1, ANC2, ANC3) was a crucial expenditure to encourage sustainable outcomes for landscapes, biodiversity, and soil protection. This is a descriptive as well as prescriptive finding. However, large sums of taxpayers’ money are often used for items that are not linked to public goods or are stipulated by reference-line conditions.

2. Materials and Methods

2.1. Cluster Analysis

The study focused on a detailed cluster analysis of Rural Development Programs (RDPs) from seven MS, including AT—Austria, CZ—Czech Republic, DE—Germany, HU—Hungary, PL—Poland, SK—Slovakia, and SI—Slovenia. These were chosen to adhere to the Granovetter terms of Polanyi’s economic analysis immersed in the substantive economic context: in particular, “controlling for countries’ demographic, economic, and environmental characteristics, the countries that are more proximate in terms of geography, common culture, and institutions, and intensity of trade relations have more similar environmental attitudes” [30]. For the sake of brevity, the study focused on the local territory within the limitation of global attractivity. This approach was appropriate for a locally anchored cluster analysis, because it allowed for data curation in a substantive and meaningful approach to the local territory. However, the results will have limited implications to the wider area, because bioclimatic, agronomic, and environmental factors may tweak the circumstances differently from the pre-selected countries in Central Europe.
The backdrop of this evaluation was a comprehensive evaluation of 105 RDPs. First, we needed to determine the essentiality of complimentary measures. The focus was mainly on the set of measures that MS have identified within the ANC as important (in terms of budgetary expenditure), rather than all measures in the 2014–2020 period. This interrogation included 13 RDPs in Germany and a full set of programmes of other federal or regionalized states (Spain, France, Italy). The overall sample of RDPs did not include Great Britain (UK), nor the French overseas territories. The detailed data that were gathered from the 13 German RDPs (i.e., regional formats) were collated into the summary (i.e., average) values. A detailed discussion is provided. In order to anchor the cluster analysis, a rapid comparison was made of choices by MS in the 2014–2020 period with those in the 2007–2013 period. Therefore, the tested hypothesis was MS would have chosen the status quo alternative in regard to the key ANC measures, as suggested by [31,32,33]. Although we found a general cross-national divergence of environmental attitudes over the period considered, cultural and institutional proximity attenuate or reverse this trend. The importance of proximity and connectedness suggests that the prospects for international coordination of rural development measures of environmental concern of Central European MS are most favorable within critically integrated sets of countries [30].

2.2. Primary Expenditure Data and Land Benefit Data

The quantitative expenditure data has been acquired from the screening of the European Commission’s key resource of around 105 rural development programs in machine translated abstracts [34]. No further databases were employed in the study. The web-based archive was screened to consolidate precise expenditure data on the set of measures. The measures were pre-selected in a systematic way (see the section on the cluster analysis) to enable the data being associated with ANC farmland. The basic data on the land benefits associated with ANC subsidy was extracted from this database.

2.3. Revealed Environmental Concern in Land-Based Rural Development Measures

These measures were evaluated for importance to each MS by examining the partitioning of rural development funds. To this end, data were pre-screened, shown in Table 1, to determine the connections of the various practices comprised in ANC3 and ANC1 (the simple ANC and the agri-environmental) measures to the reference level. In doing so, the connections to ANC2 (capital investments) were not directly addressed, because only the land-based measures were directly involved with the public goods of biodiversity, precision farming, and soil protection, studied herewith.

2.4. Study Area

There is a marked differentiation of farms according to their size as to the impact of the legacy of economic transformations of the 1990s in the 7 Central European MSs. For example, the average farm area in 2013 amounts to 16.1 hectares (EU–28). However, in each country the average farm size was much more variable: 133.0 (the Czech Republic), 58.6 (Germany), 19.4 (Austria), 10.1 (Poland), 6.7 (Slovenia), and 90.7 (Slovakia). This data documents that small farms bring down the average in EU–28, whereas the Czech Republic and a few neighbouring agricultures in Central European MS historically operate under historic conditions of relatively large farms. This can partly be explained by prevailing system of farm ownership in each state. In some regions, family farms are usually characterized by smaller area and fewer employees, and other regions of farming are operated under large companies. The structural determinants in the seven Central European MSs are contrasted with the controlling country of regions of Belgium. 70% of the agricultural land is cultivated by large agricultural companies, and the remaining 30% comprises family farms or other forms of individual farming [35]. The resulting system of ownership and the prevailing lease of agricultural land is an important institutional factor, combined with the other factors of EU funds that support farms and rural projects. In tandem, these key institutional factors interact with the land use drivers (technology, global markets, prices, diets, and population).
Regions with Alpine bioclimatic characteristics have generally higher share of ANC farmland due to rough natural conditions. Regions located predominantly in Danubian bioclimatic conditions with fertile lowlands tend to have the least share of ANC farmland. Prevailing characteristics in the study area are a continental bioclimatic condition where the ANC presence or absence depends on the much variable altitudes and other natural, climatic, and topography conditions. Table 2 documents the share of ANC farmland in individual MS with regard to the bioclimatic region.
In terms of land use, as shown by Figure 1, it was logical that countries with Alpine bioclimatic conditions displayed high proclivity to permanent grassland management (Austria, Slovenia). In contrast, Hungary was predominantly located in fertile lowlands of the Danubian bioclimatic region and accordingly dominant arable land use. The remaining countries of Central Europe, characterized by the Continental climate, had agricultural sectors with complementary arable and permanent grassland management. The figure does not show the domestic regional difference at country level, whereby it would be clear that grassland management tends to be the crux of mountain ANC farmland, whereas arable land management was more likely to be practised on productive ANC areas also representing farmland with natural constraint.

3. Results

3.1. ANC Support in Cluster Analysis

In the first step, the cluster analysis began to examine a slightly wider set of land-based measures as emphasized by MS. Of those measures, only the ones that corresponded with the key ANC measures (ANC1: Agri-environmental measure, ANC2: Capital Investments, and ANC3: the simple ANC measure) were further analysed. The original target ANC measures were complemented with the following: farm and business development, basic services, and organic farming. Table 3 shows the distribution of measures allocated with the most funds in the 2014–2020 period. The presence or absence of continuation of the respective land-based measures was marked with regard to the 2007–2013 time frame (Table 3). In the subsequent step, the quantitative expenditure data was collated for the ANC support measures (Table 4).
Ultimately, we proceeded to ascertain that the most critical feature of the cluster analysis was unit allocation of funds per hectare. The allocation was determined for the key subsidy measures, considered as major spending categories. Within the set of measures assessed, three key spending cells were the simple ANC (ANC3), agri-environment (ANC1), and productive investments (ANC2) (Figure 2). With regard to these three categories of support, our exercise was taken forward by determining the unit allocations per one hectare of ANC farmland in each country (Figure 2).
Subsequently, the ANC3 subsidy in Central European MS was subject to quality interpretation. All MS (except for Hungary and half of German RDPs) placed an emphasis on the simple ANC3 measure. The simple ANC3 measure received more than 0.22 of the total public funds for the particular country in four out of seven RDPs (Table 4). It surpasses the share of 0.16, which is an EU–27 average (excluding the UK, this share would score even less if calculated for the EU–28, because the UK/England did not introduce the ANC3 measure at all). Less than 0.10 of the overall allocation (in total public funds) was attributed to the ANC3 measure by Germany and Belgium–Wallonia. Belgium–Flanders and Hungary allocated nil or close to nil funds to the simple ANC measure (Table 4).
These results contain an important caveat: the ANC1 agri-environmental measure (rather than the simple and untargeted ANC3 subsidy) may be considered by many researchers as the most commensurate way of supporting ANC farmland. Such reasoning is invested in the more ecologically targeted and demanding array of biodiversity practices supported by the ANC1 agri-environmental measure. Even more so, the agri-environmental practices were beneficial for ANC and non-ANC farmland equally. Therefore, the funds spent on several individual measures targeting biodiversity practices, rather than the simple ANC3 subsidy, should not be overestimated. Finally, the overall sum of funds ascribed to the ANC3 measure, the ANC1 agri-environmental measure and one of the wider land-based payments for Natura 2000 support is important. In this perspective, the majority of the MSs of Central Europe support ANC farmland in a consistent way. To begin with, ANC is supported with a share of 0.17 to 0.31 of the total public funds. For the EU–27, the average share of the wider ANC measures is 0.31 of the total public funds. Within Central Europe, Hungary sets aside the smallest share (0.17), whereas the Czech Republic and Austria introduce a slightly larger share (0.51). The simple ANC3 measure, the ANC1 agri-environment and Natura2000 support, are complementary precisely and only in outcomes for land-based practices sustainable for landscapes and biodiversity. Evidence on these measures producing sustainable outcomes for precision agriculture and soil protection is still in an incipient stage.
In addition to accounting for the ANC3 measure, the ANC1 agri-environment, and Natura2000 support, the funds spent on the key ANC measure being ANC2 Capital Investment measure must be considered. Such a measure comprises spending on up-to-date technology that often allows for the landscape and biodiversity practices to be implemented on ANC farms. Within the set of countries, Hungary shows the most liberal attitude towards ascribing funds to the ANC2 Productive Investment measure (0.34 of the total public funds), whilst Austria implements the ANC2 Productive Investments measure with the limited allocation of 0.11 of total public funds.
It is often assumed that organic farming is another method of subsidy for extensive cropland, extensive grazing land, and extensive permanent crops on ANC farms. Allegedly, the measure is a veritable method that produces the best outcomes for landscapes, biodiversity, precision agriculture, and soil protection. In fact, there is a clear linkage of organic farming in relation to these public goods, yet an unclear linkage of organic farming to the criteria of natural handicap applied strictly within ANC regions. RDPs do not have to disclose whether organic farming support is associated with ANC farmers or with organic farms outside ANC regions. In the Czech Republic, 90% of organic farms were also supported with ANC Allocation to Organic Farming, as shown in Table 4. The average share of organic farming in the total public funds for the EU–27 amounts to 0.067.
Several examples of similarities and differences in MS approach include:
-
Slovakia, Slovenia, the Czech Republic, Germany, and Austria are the MS in Central Europe that identified organic farming as a key measure (prior to 2014, organic farming was part of ANC1 agri-environment as a key ANC measure in each RDP).
-
Seven out of 13 RDPs in Germany did not recognize the ANC3 subsidy as a key measure, and rather focused on the ANC1 agri-environment.
-
Four out of 13 RDPs in Germany (and also seven out of 17 RDPs in Spain and several Italian RDPs) introduced the Leader Support as a major measure.
-
The ANC support per one hectare (including ANC1, ANC2, ANC3) was quite comparable in four RDPs (including the Czech Republic), with a very close similarity in the three key cells of support. Unusually, Austria had a very large support per hectare via ANC3 and ANC1 agri-environment; this may be explained as continuation of pro-mountain protective measures that mark the historical trajectory.
-
Farm and business development (i.e., support to young farmers) was a significant measure in Central Europe, but was not used at all in German RDPs.
-
All RDPs identify ANC2: capital investments in physical assets as one of the significant measures. There was no other measure, apart from ANC2 Investments, with such a unanimous preferential approach.

3.2. Explanatory Variables for the Diverging Choices by MS

An explanatory variable for the diverging choices by MS may be linked to the general wealth of the rural economy at national or regional level. The study consulted World Bank data on the gross domestic product (GDP) indicator [39]. Although GDP-per-capita is not the most appropriate indicator of public goods, GDP is the most consistently kept data in the relevant developing regions. The hypothesis examined points to the relevance of a country’s state of economic development [40]. Rephrased in the ANC context, the hypothesis was not only that MS preferred the status quo measures when reformulating expenditure from 2007–2013 to 2014–2020, but also that the more affluent MS preferred to minimize the simple ANC3 subsidy. Such a strategy is in order to shift weight towards the more ecologically targeted and demanding ANC1 agri-environmental measure [40,41]. In the subsequent passage, we sought to clarify the data.
Our results can go only as far as the ANC definition allows. The criteria of handicap applied within the ANC regions are linked to socioeconomic and demographic factors, with regard to the general ANC category. The cause–effect linkage to GDP applies only as far as the biophysical criteria, playing a role in the Mountain-ANC category, are concerned. The definitions of handicap are such that sought to reinstate a fair distribution within the subsidy system. However, the fact remains that uneven distribution of farm size per ANC holding in Central and Eastern Europe subsequently affects the numbers of agricultural holdings in receipt of subsidies of divergent size. This is the crucial factor that must be considered to interpret ANC spending and its associated differences in each country.

3.3. Comparison of MS in Their Choices for the Time Frame of 2014–2020 and 2007–2013

Table 3 demonstrates the measures identified as significant by MS in the 2014–2020 period against the choices in the 2007–2013 period. The key and the wider measures have been screened. There was perfect consistency in reporting significance in the three key measures in support of ANC (ANC1: the agri-environmental measure, ANC2: capital investments, ANC3: the simple ANC measure). The significance has been reported in the time frame of 2007–2013 period as well as the current 2014–2020 time frame. There is less certain consistency in the linkages to the current measures in support of farm and business development (the 2014–2020 period), because the previous program introduced several distinct measures for the activities comprised therein. This finding is confirmed by [31], who note that the choice of the status quo is influenced by an attitude toward the good, and perceived choice task complexity.

4. Discussion

In this study, quantitative data was assessed in order to ascertain the extent of complementarity of ANC measures and effect on public goods in the 2014–2020 time frame. These results rest on the association of the revealed environmental concern and the measure choice (behaviour). Specifically, the revealed environmental concern and the measure choice (behaviour) determine the complementarity of how ANC measures play out in the ANC support across MS in Central Europe. Where possible, the explanatory factors of the share in total public funds that were allocated to various ANC measures were identified. Such a procedure was justified by the research question on the extent of complementarity. This is why we set out to examine whether the ANC measures (the agri-environmental, Less Favored Area subsidy, and capital investments) compete when producing public goods. This study found (1) positive outcomes on the significance of these key ANC measures in the 2014–2020 time frame and the immediately preceding 2007–2013 period; (2) the three measures demonstrated sustainable outcomes for landscapes and biodiversity, although results on the precision agriculture and soil protection are at incipient stage; and (3) data collection is an ongoing effort.
Data collection is important if one is to ensure the ongoing support of public goods related to environmental concern. Such a task underpins Granovetter’s excursus on good economic life, with reference to the Polanyi substantive economics. Of note is the finding by [42] that environmental concern was weaker in countries with citizens’ distrust and belief in external control. Individual MS, however, can still use flexibility granted by the new CAP to design national plans to protect farmland biodiversity and landscapes and to ensure long-term production of public goods. The study responded to a lack of evidence with respect to the real-world socioeconomics of land-based support outcomes for less-favored areas. We sought to find how effective ANC support was in tandem with Capital Investment support and the Agri-environment, for extensive croplands, grazing land, and permanent crops. This was not easy. Even for such a tiny group of MS as Central Europe, there were considerable divergences in farm structure. Discussing the effects of ANC subsidy does not imply only the effectiveness of small-scale farms. ANC farms can range from large in several MS to consistently small in others (Slovenia, Poland), and yet very large (1500–2900 ha) and small farms can coexist in the Czech Republic and Hungary. Both small and large farms benefitted from ANC funds [43,44]. The decollectivization forecasts of the early 1990s [44,45,46,47,48,49,50] were important, despite not proving to materialize on the ground. However, a surprising fact is the survival of very large ANC farms, often applying extensive management and intensive management: “The exit costs a member faces when one wishes to withdraw assets from the collective farm are important factors influencing the decision of collective farm members to stay or to leave and start up an individual farm“ [49].
We were keen to contest the hypothesis that economic growth helps to maintain higher levels of environmental concern [51]. In the ANC context, this hypothesis could mean that the affluent MS (Germany and Austria) would prefer the ANC1 agri-environmental rather than the simple and untargeted ANC3 measure; however, the study could not confirm this. Indeed, the Czech Republic, Slovakia, Poland, and Slovenia prioritized the simple ANC measure with around 20% of total public funds. Furthermore, the approach by Hungary had less association with the four MS. Our finding was consistent with [29]. In contrast, Germany strongly preferred the ANC1 (19.6% of total public funds, the preference of seven out of 13 RDPs) over the simple ANC measure (9.9%, the preference of six out of 13 RDPs). Austria differs from Germany with slightly more (23.0%) of the total of public funds allocated to the simple ANC3 measure, and much more (28.4%) to the ANC1 agri-environment. This finance for public goods was most welcome, but it could not resolve the security of property rights, as argued by Sikor (2005) [23], or tenure, i.e., features central to the economics of development. This remains a limitation in our approach.
The elaboration of additional distinctions in the decollectivization of Central and East European rural economies is a useful and ongoing project.
Our findings are consistent with work on rural finances, whereby the long-term need for public policies was ascertained [52,53,54,55,56,57,58]. The fact that the simple ANC3 measure is a salient resource in several of the in-depth studied Central European countries confirms the generalization through a cursory statistical overview by the international bank for reconstruction and development [59]. It was also possible to tentatively confirm the finding by [60], who noted, by referring to [61], that the simple ANC3 measure is structured in order to provide compensation for producing under less efficient circumstances, with the aim of keeping land in marginal areas under production. [60] Pufahl and Weiss (2009) analyzed the effects of the ANC3 measure in Germany by comparing similar farms with and without ANC3 support. They found that the effect of the ANC measure, in particular, was to keep land in production, and that these measures only have a small positive production effect. The simplicity of the ANC3 measure should, thus, be an alleged advantage over the ANC1 agri-environmental measure.
However, we could not support the recent quantitative data projects whereby researchers studied the extent of the finance needed to supply the desired public goods. Simply put, herewith the costs were not studied of what taxpayers want from agriculture. Rather, we assessed the main approaches by MS to use the key ANC measure (ANC1, ANC2, ANC3) in the 2014–2020 period under the rationale of ANC subsidy (ANC1, ANC2, ANC3). A detailed estimate of the costs of addressing the different environmental priorities through incentives for ANC1, the largely voluntary agricultural and forestry management in the EU–27 (excluding Croatia, including the UK), was recently undertaken [62]. This suggested that the costs of undertaking environmentally beneficial land management on agricultural and forested land in 2020 were calculated to be in the region of €34 billion/year (of which €3.5 billion was for forested land), with an additional €9 billion/year estimated to be needed for environmentally focused investment aid, subsidy on consultancy provision, and ANC3 payments in Less Favored Areas. It was estimated that, of the overall figure of €43 billion, approximately €27 billion needs to be sourced for ANC1 from the EU budget.
In this study, convincing evidence was found in the mid-term evaluation reports of the 2007–2013 RDPs of Central Europe with regard to the utility of the ANC3 and ANC1 agri-environmental measure for biodiversity [24,25]. Thus, we confirm the evidence of many other studies [63,64,65], including the call by [66] and the earlier plea by [63], [64] wherewith the thrust is for renewed evidence-building for rural policy. There is sufficient scientific evidence of unsatisfactory outcomes for biodiversity [65,66,67,68,69]. Notwithstanding farm policy effects, the excellent results of extensive agriculture itself, such as mountain grasslands of ANC farms, are tested for biodiversity [70].
Insufficient evidence remains for the emphasis on more equity in the distribution of ANC fund according to the eight biophysical criteria to determine ANC farmland [71]. There is also a certain evidence for the lack of the outcome for biodiversity aside from ANC measures, because the problem touches on the overall set of measures of the Common Agricultural Policy [72,73,74,75,76]. Finally, it is of note that this overall set of measures remains relatively rigid even in flow. The outcomes of ANC measures are crucial at a time when the attributes of rigidity and flow are pinpointed on the map of rural Europe. Here, future Britain farmers [77], as well as future rural citizens, signal political support for various integrated landscape initiatives [78]. Whether such landscape initiatives will be to the benefit of ANC implementation remains to be seen.

5. Conclusions

In conclusion, large sums of taxpayers’ money are currently being used for items that are not likely to be public goods or are stipulated by reference-line conditions. Examples are the outputs for high nature value farmland (featuring both cultural heritage and biodiversity) and precision agriculture (enabling sustainable intensification, also on certain ANC farms, without deleterious effects to the environment). However, it is uncertain whether the outlay of funds for an appropriate precision agriculture technology at farm level constitutes a public good.
Persuasive evidence has been built on the outcomes for biodiversity realized by the ANC3 (simple hectare subsidy) and ANC1 (agri-environmental) measures, in tandem with the outcomes for competitiveness realized by the ANC2 Capital Investment support. The utility attributed to the stated ANC measures has been documented in regard to the essentiality of ANC measures in the time frame 2014–2020 as well as mid-term evaluation reports of the 2007–2013 RDPs of Central Europe.
It is thus timely to dedicate efforts to more comprehensive evidence collation. Evidence matters with respect to the existing spending on land management focusing on extensive croplands, grazing land, and permanent crops, in particular through the ANC3 measure (the successor of the earlier Less Favored Area support), in tandem with ANC2 Capital Investment support and the ANC1 Agri-environment. On our evidence, ANC payments are essential in complementary ways of implementing the respective priorities of ANC1, ANC2, and ANC3. These support biodiversity outcomes of ANC farms with direct linkage to public goods and display integrity with ANC1 agri-environmental measure. Precision farming outcomes of ANC farms are only partly linked to public goods and partly integrated with ANC1. ANC payments support soil protection outcomes only with a partial association to public goods on ANC farms, and there is no direct integrity with ANC1 measure.
Further investigation is required to glean insight on a number of questions relating to the position and the complementary role of the ANC measures for farm sustenance:
-
With the changes likely to arise from the rural development package for the time frame after 2021, is it realistic to apply the ANC1, ANC2, and ANC3 measures in a complementary way to support competitiveness, maintain sustainable farming, and take care of environmental public goods?
-
Should there be a case for ANC farms that have proven outcomes for precision agriculture to be allocated more ANC support for such land?
-
Under the existing division of farm payments and the ANC measures via rural development mechanisms, should there be an argument made for tightening such regulatory mechanisms about public goods outcomes for ANC?
-
Ultimately, the vexing issue emphasized by our project results is about a distribution of farm size per ANC holding, especially in terms of how the regulatory mechanisms affect the numbers of agricultural holdings in receipt of subsidies of divergent size.
In view of collaboration by key actors in support of an ANC economy, several issues will have to be resolved. Validity of data or empirical information, insecurity about scientific knowledge, and disputes on how to manage knowledge emerge as central concerns when studying changes in rural development under the influence of sustainability discourses.

Author Contributions

J.P.: conceptualization, analyses, and writing. J.S.: conceptualization and editing. All authors have read and agreed to the published version of the manuscript.

Funding

This research received no external funding. Thanks for funds provided from the institutional grant on support of outstanding graduates in postdoctoral positions.

Acknowledgments

I am grateful for invaluable comments by colleagues who made this a better paper. Many thanks to Theresa Ann Reinhardt Piskáčková for professional proofreading.

Conflicts of Interest

The authors declare no conflict of interest.

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Sustainability 12 10534 g001 550
Figure 1. Prevailing land use (share of the total agricultural aera) with regard to the study area. Source: Eurostat, 2018 [36].
Figure 1. Prevailing land use (share of the total agricultural aera) with regard to the study area. Source: Eurostat, 2018 [36].
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Sustainability 12 10534 g002 550
Figure 2. Three categories of ANC support per one hectare by Member State (ANC2 corresponds to INV = capital investments, ANC1 corresponds to AE = agri-environment, ANC3 corresponds to LFA = a simple measure for farming in areas with natural constraint). Source: assessment based on (i) RDPs 2014-2020 (ii) [38], Poláková, 2018.
Figure 2. Three categories of ANC support per one hectare by Member State (ANC2 corresponds to INV = capital investments, ANC1 corresponds to AE = agri-environment, ANC3 corresponds to LFA = a simple measure for farming in areas with natural constraint). Source: assessment based on (i) RDPs 2014-2020 (ii) [38], Poláková, 2018.
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Table
Table 1. Agricultural practices that comply with public good on ANC farms.
Table 1. Agricultural practices that comply with public good on ANC farms.
Agricultural PracticeLinked to a Public Good of ANC 1Fulfils PPP 2Integrity with Agri-Environment
BiodiversityYesYesYes
Precision FarmingPartlyPartlyPartly
Soil ProtectionPartlyNoNo
Note: 1—Public good = a targeted practice for biodiversity, precision agriculture, and soil functionality edging on excludability and non-rival character; 2—PPP: Polluter Pays Principle. Source: author assessment.
Table
Table 2. Biophysical determinants (climatic region, surface area) of ANC farmland per Member State.
Table 2. Biophysical determinants (climatic region, surface area) of ANC farmland per Member State.
MSBioclimatic RegionShare of ANC Farmland in Total Country Agricultural Area
(Before/After 2018 Redefinition)
BelgiumAtlantic0.820/0.820
Czech RepublicContinental/Danubian0.492/0.565
GermanyContinental0.520/0.426
HungaryPannonian0.207/0.207
AustriaAlpine/Danubian0.641/0.641
PolandContinental0.625/0.587
SloveniaAlpine/Continental0.924/0.924
SlovakiaPannonian, Continental0.613/0.627
EU-28Continental/Atlantic/Alpine0.456
Source: Eurostat, 2018 [36]; Rivas et al. [37].
Table
Table 3. The key and the wider subsidy measures in seven Central European Member States.
Table 3. The key and the wider subsidy measures in seven Central European Member States.
MSSimple Hectare Subsidy
ANC3		Agri-Environment
ANC1		Investments in Physical Assets A
ANC2		Farm and Business Development BBasic ServicesOrganic Farming C
Key ANC measuresWider measures
SlovakiaXXX X
Czech RepublicXXX X
HungaryXXXXX
PolandXXX X
SloveniaXXX X
Germany
(13 RDPs)		 XX XX
AustriaXXX XX
Source: Assessment based on machine-translated abstracts of RDPs 2014–2020. Note: Gray shade marks the measures that are allocated with most funds within the respective country. X identifies measures that were also crucial in the 2007–2013 period. A—ANC2 covers, e.g., capital investments and projects such as added value products. B—covers activities of several measures implemented in 2007–2013 (e.g., support to young farmers, farm diversification, and support to rural micro-businesses). C—Organic farming was contained within the ANC1: agri-environmental measure in 2007–2013.
Table
Table 4. Budget expenditure for ANC farmland in seven Central European Member States, in Mio Euro.
Table 4. Budget expenditure for ANC farmland in seven Central European Member States, in Mio Euro.
MSSimple Hectare Subsidy
ANC3		Agri-Environment
ANC1		Investments in Physical Assets
ANC2		Organic FarmingNatura 2000ANC Total 1Total Public FundsShare of ANC in Total
Belgium–Flanders0199.2504.010.100924.50.21
Belgium–Wallonia58147.5155.8100.039.139.1654.50.37
Slovakia482.6143.8542.190.08.8626.42079.60.30
Czech Republic676.9905.0563.0330.74.21581.93074.20.51
Hungary76.2638.01425.2207.6165.7714.24174.00.17
Poland2166.01184.03332.1700.00.03350.013513.30.25
Slovenia265.9203.6152.060.20.0469.51107.30.42
Germany (13 RDPs)1668.23313.82973.31637.5121.44982.016897.40.29
Austria1794.12218.6885.0784.63.54012.77811.60.51
Source: Assessment based on machine-translated abstracts of RDPs 2014–2020; Note: 1—sum of supports of ANC, agri-environment, and Natura2000.
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Poláková, J.; Soukup, J. Results of Implementing Less-Favoured Area Subsidies in the 2014–2020 Time Frame: Are the Measures of Environmental Concern Complementary? Sustainability 2020, 12, 10534. https://doi.org/10.3390/su122410534

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Poláková J, Soukup J. Results of Implementing Less-Favoured Area Subsidies in the 2014–2020 Time Frame: Are the Measures of Environmental Concern Complementary? Sustainability. 2020; 12(24):10534. https://doi.org/10.3390/su122410534

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Poláková, Jana, and Josef Soukup. 2020. "Results of Implementing Less-Favoured Area Subsidies in the 2014–2020 Time Frame: Are the Measures of Environmental Concern Complementary?" Sustainability 12, no. 24: 10534. https://doi.org/10.3390/su122410534

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Poláková, J., & Soukup, J. (2020). Results of Implementing Less-Favoured Area Subsidies in the 2014–2020 Time Frame: Are the Measures of Environmental Concern Complementary? Sustainability, 12(24), 10534. https://doi.org/10.3390/su122410534

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