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A Swiss popular initiative reflecting large public concerns about the negative environmental impacts of agricultural production launched a proposal to rigorously tighten environmental cross-compliance standards. The so-called drinking water initiative (DWI) proposes restricting direct payments to farms that (1) preserve biodiversity, (2) do not use any pesticides, (3) adapt their livestock to their on-farm feed capacity and (4) do not use antibiotics regularly or prophylactically. Based on the recursive-dynamic, agent-based agricultural sector model SWISSland, we assessed, ex-ante, the impacts of the initiative on environmental and economic indicators at the farm- and sector-level. Stakeholders from both groups, supporters and opponents of the initiative, were involved in the assessment. We found that the incorporation of far more stringent environmental standards into the cross-compliance system caused a larger number of farms to opt-out: For 33–63% of the pork and poultry farms and 51–93% of the vegetable/orchards/winery farms, it was more profitable to forego direct payments. However, the majority of the ruminant farms (87%) were expected to comply with the standards. Although the non-complying farm types were associated with the most severe environmental impacts, we found that the initiative nonetheless had positive effects on water quality at the sectoral level in Switzerland: e.g., the share of pesticide-free arable land increased to 70–92%, those of the permanent cropland to 11–52%, and the nitrogen surplus decreased. However, the total agricultural production measured in calories decreased (12–21%), and therefore agricultural imports would increase. If the current direct payment budget goes completely to the complying farms, and if these farms receive a price premium, then we predict an average farm income increase of 2–34% for the complying farms; otherwise, a decrease of 6–22% will be found depending on the scenario. A sensitivity analysis showed that price uncertainties had the highest impact on farm income. • Impacts of stricter cross-compliance standards in Switzerland are analysed using an agent-based model. • Cross-compliance standards become stricter by incorporating a ban on pesticides and on-farm feed balances • Leading to positive effects on water quality, though consequently increasing the number of farms that opt-out. • Causing a decrease of the total agricultural production in Switzerland and therefore an increase in agricultural imports. • Non-complying farms would produce more intensively, at the same time complying farms would produce more extensively. [ABSTRACT FROM AUTHOR]

Most Western-European countries exceed the critical loads for nitrogen (N) losses. High nitrogen (N) inputs make agriculture one of the largest contributors to N pollution. There might be a potential to reduce this losses with an output tax on animal products, as they have low N use efficiency and a tax has the potential to reduce the consumption of this products. We want to assess the potential of a food tax on animal products to reduce the N surplus of Swiss agriculture. We implemented a tax on meat and a tax on milk and meat in the agent-based model SWISSland. The model combines an agent-based model with a microeconomic model at the farm scale. To better understand the low response of the food tax, we applied in a second step a robust two-step global sensitivity analysis of abatement costs of individual model agents. Imposing a tax led to an N surplus reduction of 2.1% where only meat was taxed and 2.3% where both milk and meat were taxed. The sensitivity analysis showed that distinct agents reacted non-uniformly to changing prices, so that the effect of the tax was sometimes even cancelled out. This calls for more differentiated policies to reduce the negative impact of N losses. The overall impact of the food tax was minor as the distinct agents react not uniformly to lower producer prices. [Display omitted] • Nitrogen surpluses of Swiss agriculture remain on a high level since the 90's. • We assessed the effects of a food tax on nitrogen surplus in the agent-based model SWISSland. • Food taxes on milk and meat products reduced nitrogen surpluses by 2.1% to 2.3%, respectively. • A robust sensitivity analysis on different model agents revealed that distinct agents react differently to varying prices. • Food taxes are not effective to reduce nitrogen surpluses as distinct farms react non-uniform to changing prices. [ABSTRACT FROM AUTHOR]