Improvement of water quality as a joint production of milk when dairy farms are heterogeneous

We present the impact of the farms heterogeneily on the promotion of non-commodily outputs on a French case study. We show first that the large heterogeneity of the ratio of the amount of non-commodity and commodity outputs supplied by the farms can 00 captured by aonedimensional parameter: the type of the farm. Second, using the relationship OOtween the amount of non-commodity and commodily outputs supplied by the farms and their types, a regulator can design an optimally differentiated policy to promote the supply of the non-commodity output without weakening too much the supply of the commodily output and the farmers' revenue. keywords: joint production, farms heterogeneily, Iinear regulation, differentiated regulation