Author ORCID Identifier

https://orcid.org/0000-0002-3072-3141

Year of Publication

2020

Degree Name

Doctor of Philosophy (PhD)

Document Type

Doctoral Dissertation

College

Agriculture, Food and Environment

Department

Agricultural Economics

First Advisor

Dr. David Freshwater

Abstract

The dissertation examines the idea that current and future challenges faced by the European agricultural sector call for a multidimensional approach combining the classical path of productivity growth with more stringent commitments to environmental protection, and more incisive mitigation and adaptation actions to mitigate climate change, all within a policy context of a transition toward the cyclical management of resources (inputs, outputs and wastes) inspired by the circular economy concept. The three essays of the dissertation aim to show: that agricultural productivity in Europe is supported by complementarities between public and private investments in agricultural research with remarkable results in terms of rates of return; that the processes of knowledge-based innovation adoptions improve the economic performance of farms, especially by focusing on higher quality and value-added of agricultural production; and that an innovative approach, based on a combination of policy coherence and targeted technological solutions, can trigger the circularity of water use across urban and agricultural economic sectors, providing a valid solution for improving the allocative efficiency of irrigation water, while safeguarding the status of the aquifers and the river basins.

The reading key for the dissertation is, innovation conditioned by policy priorities, and the three essays provide a perspective on the evolution of the role of agricultural innovation over time in the context of the changing policy priorities of the European Union. Since the 1950s innovation in agriculture has always been an engine of economic growth in Europe. Over time, patterns of the creation and diffusion of agricultural innovation in Europe changed notably, from improving farm productivity and intensification in the first periods, then to sustainable intensification and natural resource (environmental) protection in a second period, and most recently a new focus on implementing a more circular economy. The dynamics that lead from research to innovation, and from innovation to economic growth are changing as well. Europe is assisting a switch from the old linear transmission of knowledge approach (research-extension-farmer) to a more modern network-type agricultural knowledge and innovation system (AKIS) (Klerkx et al., 2009), as well in making transitions from the linear paradigm of economic growth to a more circular economy system by closing the loop and guaranteeing productivity improvement without impairing natural resources (EC, 2015).

The objective of this dissertation is threefold: i) macro – to assess the economic impact of public investments in agricultural research on agricultural productivity in Europe through analysis of aggregate rates of return; ii) micro – to assess the impact of information, research in primis, at the farm level through the analysis of the effects of innovation adoption on individual farm profitability in one region of Italy; and, iii) environmental – to explore theoretical application of the circular economy concept to the reuse of water and irrigation management.

The first essay provides an evidence-based assessment of the impacts of publicly supported R&D and innovation of agriculture in Europe. A panel model framework is applied to 16 European countries. The impacts of R&D investments and agricultural patents on agricultural productivity (TFP) were estimated, and rates of return (RoR) from public expenditures have been computed. The results vary according to the length of the imposed lags, showing a positive but decreasing pattern of effects both on TFP and return rates. Although preliminary, the values are deemed consistent with the evolution of research productivity over the last three decades in Europe, which has been characterized by a shift of the CAP from productivity enhancing investments, to a public commitment to improving environmental sustainability.

The second essay aims at analyzing the determinants of farmers’ adoption of innovations and studying their effect on profitability. Different from existing literature, beyond examining adoption behavior, I investigate whether the source of information and the connection of agricultural research with an adopted innovation influences the economic performance of farms. Relying on primary data collected in the Bologna province (Italy), an econometric analysis is conducted in order to assess determinants of adoption and to estimate the impacts of such decisions on farm profitability. The results indicate that a farmer having a connection to scientific research, although not determinant for the adoption decisions, triggers significant improvements in profitability, in terms of value-added and quality of production, but does not affect other profitability-related parameters.

The third essay proposes a framework for the Circular Economy (CE) concept to be applied to the water sector. The European Green Deal and the CAP post-2020 challenge the European agricultural sector by imposing stricter environmental cross-compliance measures linked to a strong demand for improved competitiveness, all within an overarching policy framework that pursues: the circularity of resources, climate neutrality, and economic growth decoupled from resource use. Although the agricultural sector has been excluded from the direct application of the CE concept, it remains highly subject to various requirements to pursue sustainable intensification, with frequent risks of: prosecution for environmental noncompliance, and of production and income losses, due to market volatility and climate change, especially related to the scarcity of water resources. However, a possible solution might be found in the proposal of a CE framework that is able to provide for a combined set of policy measures, coordinated across the urban and the agricultural sectors, and that mainly deal with specific technological improvements aimed at producing safe additional irrigation water from urban treatment plants and at optimizing the irrigation use, seemingly without consequences on levels of current water tariffs.

Digital Object Identifier (DOI)

https://doi.org/10.13023/etd.2020.433

Funding Information

The first and second essays have been developed as further evolution of previous studies supported by the “IMPRESA” - Impact of Research on EU Agriculture - project, which received funding from the European Community’s Seventh Framework Programme under the GA 609448 in 2013.

Available for download on Monday, May 24, 2021

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