The Dual Impact of Organic Farming Support: Evaluating Greenhouse Gas Emissions Abatement and Private Payoffs

This study evaluates whether financial support for organic farming under the EU Common Agricultural Policy (CAP) effectively contributes to reducing greenhouse gas (GHG) emissions in agriculture. Using data from a panel of Italian farms between 2015 and 2022, we examine both the private benefits (farm income) and societal outcomes (GHG emission reductions) associated with the adoption of organic practices. To account for differences in farm-level responses, we develop an analytical framework of farmers' decision-making and apply causal machine learning techniques that allow for heterogeneous treatment effects. Our findings reveal that while many farmers benefit economically from adopting organic farming, the impact in terms of GHG abatement is often limited. These results raise concerns about the overall effectiveness and efficiency of current CAP support and suggest directions for improving policy design.