**A Case Study on the Application of the Analytic Hierarchy Process (AHP) to Assess Agri-Environmental Measures of the Rural Development Programme (RDP 2007–2013) in Slovenia**

Monica Huehner, Črtomir Rozman and Karmen Pažek

Additional information is available at the end of the chapter

http://dx.doi.org/10.5772/63924

#### **Abstract**

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The reform of the Common Agricultural Policy (CAP) in 2003 focused mainly on the economic and environmental challenges. The Rural Development Programme 2007– 2013, hereafter RDP, being implemented in Slovenia is therefore aiming at promoting proposed activities that help to improve the rural areas. Agri-environmental meas‐ ures (AEMs) encourage farmers to make an environmental commitment for a period of at least 5 years aiming at preserving the environment and maintaining the country‐ side. Because of practising environmental friendly production methods, the farmers might be encountered with more costs and reduction of yield. Therefore, payments are made as compensation. Concentrating only on one of the four pillars of the RDP, "Improvement of environment and the countryside", this paper attempts to assess the Slovenian agri-environmental measures with the help of the multicriteria decision analysis, that is, analytic hierarchy process (AHP) and its supporting software Expert Choice™. In the presented case study, three main criteria and their attributes were determined. With the help of experts (questionnaires), data were collected, which made the assessment possible. The results show that organic fruit, vine and horticultural production are seen as the most important AEM. This is specific for the Republic of Slovenia because of its large amount of area designated as least favoured areas (LFA) that are not suitable for arable farming.

**Keywords:** agri-environmental measures, rural development programme, multicrite‐ ria decision method, analytic hierarchy process, Expert Choice™

© 2016 The Author(s). Licensee InTech. This chapter is distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/3.0), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

#### **1. Introduction**

For a long time, agriculture was marked by intensive production practices, which meant that the massive use of mineral fertilisers and pesticides was indispensable to achieve high yields. This led to the deterioration of the environmental conditions [1]. The pollution of soils and ground water was the result, biodiversity dwindled [2]. The Slovene agriculture is not an exception. The resources in Slovenia are already limited because of unfavourable natural conditions. More than 75% of the Slovene territory lies in the less favoured areas (LFA), where agricultural practice is limited by natural factors. More than half of the Slovene territory is covered by forests. Also, 90% of the entire Slovene territory is classified as rural, with 57.2% of its inhabitants living there [3]. Of the 57.2% inhabitants in the rural areas, only 6% are engag‐ ed in agriculture [4]. Agriculture has a potential of making a great contribution to the econom‐ ic development in the rural areas. The emphasis in today's agricultural policies, therefore, has to be on sustainable agricultural production, which can be practised and maintained when the following three main features are fulfiled [3,5]:


Sustainable agricultural production is strongly linked to the environmental aspect. Many countries or regions in the world have therefore adopted environmental programmes to slowly suit the changing agricultural production methods and to counter climatic change. While a couple of years ago environmental protection was a fashion, today, it has become a strong and indispensable philosophy being followed in all aspects of life. The research on the role of environmental attitudes towards the participation in the next generation of agriculture conservation programmes was already going on in the USA in 1999 [6]. Ho et al. [7] point the importance of the Environmental Technology Centre of the Murdoch University in Australia with training and research programmes on renewable energy in the context of environmentally sound technologies. Zbinden and Lee [8] state that since 1997, Costa Rica's Payments for Environmental Services Programme has provided payments to more than 4400 farmers and forest owners for reforestation, forest conservation and sustainable forest management activities. The idea of a Danube River Basin environmental programme was born in Sofia in 1991, and the programme was started in 1992 as described by Nachtnebel [9]. Nachtnebel [9] points out that the Danube River Basin environmental programme provides for joint actions of the 10 Danubian countries to assist integrated environmental management in the basin. Environmental programmes are not only limited to the agriculture but are also found in the industrial sector. Abaza [10] argued that the structural adjustment programmes of the World Bank in the 1990s, packages of economic reforms specifically designed to enhance the recovery of economies in crises, were urged to address environmental issues. Abaza elaborates further that efficient management of natural resources is essential for sustainable development and poverty alleviation. To promote and support sustainable agriculture in its member states, the European Union introduced a Common Agricultural Policy (CAP) [11]. Within the scope of A Case Study on the Application of the Analytic Hierarchy Process (AHP) to Assess Agri-Environmental Measures of the Rural Development Programme (RDP 2007–2013) in Slovenia http://dx.doi.org/10.5772/63924 39

**1. Introduction**

**•** Social acceptability

**•** Economic feasibility

**•** Environmental reliability

following three main features are fulfiled [3,5]:

For a long time, agriculture was marked by intensive production practices, which meant that the massive use of mineral fertilisers and pesticides was indispensable to achieve high yields. This led to the deterioration of the environmental conditions [1]. The pollution of soils and ground water was the result, biodiversity dwindled [2]. The Slovene agriculture is not an exception. The resources in Slovenia are already limited because of unfavourable natural conditions. More than 75% of the Slovene territory lies in the less favoured areas (LFA), where agricultural practice is limited by natural factors. More than half of the Slovene territory is covered by forests. Also, 90% of the entire Slovene territory is classified as rural, with 57.2% of its inhabitants living there [3]. Of the 57.2% inhabitants in the rural areas, only 6% are engag‐ ed in agriculture [4]. Agriculture has a potential of making a great contribution to the econom‐ ic development in the rural areas. The emphasis in today's agricultural policies, therefore, has to be on sustainable agricultural production, which can be practised and maintained when the

38 Applications and Theory of Analytic Hierarchy Process - Decision Making for Strategic Decisions

Sustainable agricultural production is strongly linked to the environmental aspect. Many countries or regions in the world have therefore adopted environmental programmes to slowly suit the changing agricultural production methods and to counter climatic change. While a couple of years ago environmental protection was a fashion, today, it has become a strong and indispensable philosophy being followed in all aspects of life. The research on the role of environmental attitudes towards the participation in the next generation of agriculture conservation programmes was already going on in the USA in 1999 [6]. Ho et al. [7] point the importance of the Environmental Technology Centre of the Murdoch University in Australia with training and research programmes on renewable energy in the context of environmentally sound technologies. Zbinden and Lee [8] state that since 1997, Costa Rica's Payments for Environmental Services Programme has provided payments to more than 4400 farmers and forest owners for reforestation, forest conservation and sustainable forest management activities. The idea of a Danube River Basin environmental programme was born in Sofia in 1991, and the programme was started in 1992 as described by Nachtnebel [9]. Nachtnebel [9] points out that the Danube River Basin environmental programme provides for joint actions of the 10 Danubian countries to assist integrated environmental management in the basin. Environmental programmes are not only limited to the agriculture but are also found in the industrial sector. Abaza [10] argued that the structural adjustment programmes of the World Bank in the 1990s, packages of economic reforms specifically designed to enhance the recovery of economies in crises, were urged to address environmental issues. Abaza elaborates further that efficient management of natural resources is essential for sustainable development and poverty alleviation. To promote and support sustainable agriculture in its member states, the European Union introduced a Common Agricultural Policy (CAP) [11]. Within the scope of

CAP and to be able to successfully integrate the environmental aspect, agri-environmental measures (hereafter AEM) were compiled as part of the second pillar of the Slovenian rural development programme (RDP) aiming at improving the environment and the rural areas. AEM are now compulsory for all EU member states. Each EU member state has its own RDP especially compiled to suit their circumstances and special conditions. Petersen [12] from the European Environment Agency gathered information on the countries preparing to access the European Union using questionnaires and information from the responsible national minis‐ tries. He used this data for his exposition with the main focus on agri-environmental pro‐ grammes of the candidate countries. AEM enable payments to farmers who voluntarily take up environmental commitment for at least five years. In these 5 years, they commit themselves to use environmental friendly production methods (RDP 2007–2013). The emphasis is on the right balance between competitive agricultural production and the respect of nature and the environment. Furthermore, awareness of sustainable production with focus on regenerative use of the available natural resources has to be roused [13]. AEM also ensures agricultural production that suits the needs of consumers and protects their health. Through these measures, the standard of living in the countryside is expected to be improved.

An ex ante evaluation carried out by the Biotechnical Faculty of the University of Ljubljana together with the Danish Orbicon in September 2006 using the Strengths, Weaknesses, Opportunities, Threats (SWOT) analysis was to help reveal loopholes and faults in the draft for the RDP. In the evaluation, the need for a hierarchical structure of the objectives was mentioned several times in order to clearly determine the main objective and the subobjectives [14].

Cunder analysed the role of rural development policy in environmental and land management in Slovenia based on a desk research [15–17] using the legislative documents like the Common Agricultural Policy Reform from the EU and the document on the analysis of the accession of Slovenia and its agriculture into the EU in 2004. No modelling was done in all these cases. At this point, in the decision-making process, the analyst should consider a multicriteria (objec‐ tive) decision analysis approach (hereinafter MCDA), which combines different mathemati‐ cally based methods—the most commonly known approaches are the utility theory and the analytical hierarchical process [18–20]. Multicriteria analysis (MCA), also known as multicri‐ teria decision analysis (MCDA), is an umbrella term for a number of decision-making techni‐ ques. As the name implies, MCDA makes it possible to tackle "problems" with many different conflicting criteria. According to the Department for Communities and Local Government in London [21], their role is to deal with the difficulties that human decision-makers have been shown to have in handling large amounts of complex information in a consistent way. In agriculture, decisions to be made are complex, mostly consisting not only of a single criterion but multiple criteria as in the implementation of the AEM. Thus, many criteria determine or influence the optimum decision. For such complex decision-making procedures, the tradi‐ tional mathematical programming, especially linear programming, is therefore not adequate for modelling them [22]. Also, just determining strengths, weaknesses, opportunities and threats does not analyse the problem being assessed thoroughly enough. The relations and interactions of the criteria are not determined.

Besides for making decisions, some scientists [23–25] have used MCDA methods also as assessment tools. Ferrarini et al. [26] used MCA to assess and compare municipal performance in environmental quality and sustainability in the province of Reggio Emilia in Italy. Gómez-Limón et al. [27] also made use of MCA to analyse input usage in agriculture and the way it affects the environment. Hellstrand [28] found MCA useful to survey the sustainability effects of increasing concentrate intensity in Swedish milk production. Solomon and Hughey [29] proposed a MCA decision support tool for international environmental policy issues on the example of emissions control in the international aviation sector. Crete Tsoutsos et al. [30] showed how sustainable energy planning can be done by MCA. The analysis of air pollution [31] and soil pollution [32] in an urban area in Serbia was done by Nikolić et al. using MCA. For improving strategic environmental assessment of water programmes in Brazil, MCA was also taken by Garfì et al. [58]. In Malaysia, Al-Hadu et al. [33] showed how useful MCA is for environmental management. Payraudeau and Gregoire [34] modelled pesticides transfer to surface water with MCA.

One of the most common methods of MCA is analytical hierarchical process (AHP). AHP has found its use in a few branches of the agricultural field for more than two decades, though not extensively. It has since been very attractive and useful for water management engineers. Pillai and Rasu [35] used this method for ranking irrigation management alternatives in an Indian region in order to increase the effectiveness of the irrigation system, which was underutilised. Tiwari et al. [36] used AHP to develop a framework for environmental-economic decision making that includes the environmental and economic sustainability criteria, and local people's preferences in the context of a lowland irrigated agriculture system in Thailand. The method was also relevant for Ni and Li [37], who used it for the assessment of soil erosion in terms of land use structure changes. Tran et al. [38] used AHP to prioritize future renewals of irrigation and drainage assets in the La Khe irrigation scheme in North Vietnam; Srdjevic and Medeiros [39] also demonstrated the use of AHP for the assessment of water management plans. Braunschweig and Becker [40] showed how AHP could be used in international agriculture to choose research priorities. Pažek et al. [18] used AHP for evaluation of business alternatives on organic farms. Liu et al. [5] made an assessment of how sustainable a high-yield agro ecosystem in Huantai County, China, was. In Iran, Rezaei-Moghaddam and Karami [41] used AHP for the evaluation of sustainable agricultural development models. Ziolkowska [42] used AHP in combination with cost-effectiveness analysis for the evaluation of the AEM and analysis of the economic aspects to support the decision-making process of the Polish gov‐ ernment. In the same year, Ziolkowska [43] also combined AHP and linear programming to estimate the importance of AEM with respect to the environmental objectives and calculate an objective orientated budget allocation for AEM. Ziolowska also used the AHP to investigate/ evaluate the importance of AEM from the regional perspective in Poland. Mortazavi et al. [44] showed how AHP can successfully be used for prioritizing agricultural research projects. Vindis et al. [45] also used AHP to perform a further evaluation of energy crops for biogas production.

The aim of this paper is therefore a further attempt to show how multicriteria decision models can be successfully applied in the assessment of agricultural problems, the main focus being on the assessment of AEM in Slovenia. The paper is organised as follows: first, we present the methodology and describe the AHP model, and this is followed by the main results. The main findings conclude this article.
