Conserving natural resources in olive orchards on sloping land: Alternative goal programming approaches towards effective design of cross-compliance and agri-environmental measures

Olive farming on sloping land in southern Europe is facing multiple challenges and it is reasonable to believe that farmers will opt for the abandonment of some systems and intensification or change to organic production of other systems. The issues at stake surpass financial farm viability and two EU policy instruments – cross-compliance and agri-environmental measures (AEM) – are available to address environmental objectives. This paper explores how cross-compliance and AEM policy options may lead to shifts in olive production systems and their social and environmental effects in Trás-os-Montes, NE Portugal over 25 years under two sets of conditions of uncertainty: decision-making by land users and market scenarios. Uncertainty in decision-making is addressed by employing five alternative goal programming models. The models include Linear Programming (LP), Weighted Goal Programming (WGP) and MINMAX Goal Programming (MINMAX GP), the GP variants of which are moreover formulated from a societal (S) and farmer (F) perspective. Uncertainty in market prospects is addressed by projecting olive oil and labour prices and trends in farm subsidies, distinguishing four price combinations in market scenarios. The models were validated by their capability to reproduce the initial configuration of olive production systems. Six policy options are evaluated under the complete ranges of uncertainty factors in a total of 6 × 5 × 4 = 120 model runs. Results show overall large effects of farmer decision-making and market scenarios. The cross-compliance and AEM policy instruments have an unequivocal effect on environmental performance and help to maintain work in rural areas. However, farmer income levels are insensitive to the policies, all work is absorbed by family labour and important environmental issues linked to more intensive systems such as pollution are not addressed. In a case study with the WGP (F) model which best reproduced the initial configuration of production systems, cross-compliance was moreover found to burden farmers under adverse market conditions, while AEM contributed to farmer’s objectives under favourable market conditions. A solution would be to focus cross-compliance regulations on intensive systems and offer appropriate AEM for traditional or abandoned orchards. Both policy instruments proved effective, but there is scope for removing substantial overlap between them.