Cross Compliance of CAP First Pillar Measures: A Transaction Costs Assessment

The 2003 review of the Common AgriculturalPolicy (CAP) has introduced several new policy tools,among which cross-compliance. The introduction of thisnew policy entails production costs, along with othertypes of costs arising at the farm level: administrative,information, organisational costs, called transactioncosts. The purpose of this paper is to determine thenature of transaction costs and to assess them. Theliterature on transaction costs in agriculture has, untilnow, mainly been devoted to the voluntary measuresimplemented within the framework of the Europeanagri-environmental policy. The first part of the paperintends to use this literature to apply the privatetransaction costs analysis to the issue of crosscompliance. The second part attempts to assess thesecosts. On the basis of a survey conducted in 2006 amonga sample of 39 farmers from the Midi Pyrenees Frenchregion, a descriptive statistical analysis (MultipleClassification Analysis - MCA) permits to associatefarmer profiles with different levels of incurredtransaction costs. These profiles reveal the impact whichthe farmers’ responsibilities (professional networks) andthe role of voluntary commitments previouslyundertaken may have on the nature and importance oftransaction costs. This paper opens up new perspectiveson the adoption criteria that should be taken intoaccount in the evolution of agri-environmentalregulations. It appears that growing administrativerequirements could prompt farmers to outsource taskswhich most of them carry out on their own today.