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Static and Dynamic Distributional Effects of Decoupled Payments: Single Farm Payments in the European Union

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Author Info
Pavel Ciaian
d’Artis Kancs
Johan F.M. Swinnen

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Abstract

This paper analyses the distributional effects of decoupled Single Farm Payments (SFP) in the European Union. In a static world the SFP benefit only farmers, irrespective of the implemented SFP model and irrespective of whether entitlements are tradable or not, except when the size of the allocated entitlements is larger than the eligible area and/or if entrants are eligible for the SFP. Then the SFP gets either partially or fully capitalized into land values and landowners benefit. In a dynamic world the effects depend on the nature of structural change, on the tradability of entitlements, and on the implementation model.

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File URL: http://www.econ.kuleuven.ac.be/licos/DP/DP2008/DP207.pdf
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Paper provided by LICOS - Centre for Institutions and Economic Performance, K.U.Leuven in its series LICOS Discussion Papers with number 20708.

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Date of creation: 2008
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Handle: RePEc:lic:licosd:20708

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Related research
Keywords: Land market; agricultural policy rents; decoupled subsidies; land capitalization;

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Find related papers by JEL classification:
D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
D30 - Microeconomics - - Distribution - - - General
H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Pavel Ciaian & Johan F.M. Swinnen, 2007. "Credit Market Imperfections and the Distribution of Policy Rents: The Common Agricultural Policy in the New EU Member States," LICOS Discussion Papers 18307, LICOS - Centre for Institutions and Economic Performance, K.U.Leuven. [Downloadable!]
    Other versions:
  2. Rucker, Randal R & Thurman, Walter N & Sumner, Daniel A, 1995. "Restricting the Market for Quota: An Analysis of Tobacco Production Rights with Corroboration from Congressional Testimony," Journal of Political Economy, University of Chicago Press, vol. 103(1), pages 142-75, February. [Downloadable!] (restricted)
  3. Hennessy, David A., 1998. "The Production Effects of Agricultural Income Support Policies under Uncertainty," Staff General Research Papers 1207, Iowa State University, Department of Economics.
  4. Desquilbet, Marion & Guyomard, Herve, 2002. " Taxes and Subsidies in Vertically Related Markets," American Journal of Agricultural Economics, American Agricultural Economics Association, vol. 84(4), pages 1033-41, November. [Downloadable!] (restricted)
  5. Dewbre, Joe & Anton, Jesus & Thompson, Wyatt, 2001. " The Transfer Efficiency and Trade Effects of Direct Payments," American Journal of Agricultural Economics, American Agricultural Economics Association, vol. 83(5), pages 1204-14. [Downloadable!] (restricted)
  6. Hatcher, Aaron, 2005. "On the Microeconomics of Quota Management in Fisheries," Marine Resource Economics, Marine Resources Foundation, vol. 20(1). [Downloadable!]
  7. Salhofer, Klaus & Schmid, Erwin, 2004. "Distributive leakages of agricultural support: some empirical evidence," Agricultural Economics, Blackwell, vol. 30(1), pages 51-62, January. [Downloadable!] (restricted)
  8. Hervé Guyomard & Xavier Delache & Xavier Irz & Louis-Pascal Mane, 1996. "A Microeconometric Analysis Of Milk Quota Transfer: Application To French Producers," Journal of Agricultural Economics, Blackwell Publishing, vol. 47(1-4), pages 206-223. [Downloadable!] (restricted)
  9. Pavel Ciaian & Johan F.M. Swinnen, 2006. "Land Market Imperfections and Agricultural Policy Impacts in the New EU Member States: A Partial Equilibrium Analysis," American Journal of Agricultural Economics, American Agricultural Economics Association, vol. 88(4), pages 799-815, November. [Downloadable!] (restricted)
    Other versions:
  10. Sheldon, Ian M. & Pick, Daniel H. & McCorriston, Steve, 2001. "Export Subsidies And Profit-Shifting In Vertical Markets," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 26(01), July. [Downloadable!]
  11. Alston, Julian M. & James, Jennifer S., 2002. "The incidence of agricultural policy," Handbook of Agricultural Economics, in: B. L. Gardner & G. C. Rausser (ed.), Handbook of Agricultural Economics, edition 1, volume 2, chapter 33, pages 1689-1749 Elsevier. [Downloadable!] (restricted)
  12. Barry K. Goodwin & Ashok K. Mishra & François N. Ortalo-Magné, 2003. "What's Wrong with Our Models of Agricultural Land Values?," American Journal of Agricultural Economics, American Agricultural Economics Association, vol. 85(3), pages 744-752, 08. [Downloadable!] (restricted)
  13. Chantal Le Mouel, 2004. "Impacts of alternative agricultural income support schemes on multiple policy goals," European Review of Agricultural Economics, Oxford University Press for the Foundation for the European Review of Agricultural Economics, vol. 31(2), pages 125-148, June.
  14. Nancy H. Chau & Harry de Gorter, 2005. "Disentangling the Consequences of Direct Payment Schemes in Agriculture on Fixed Costs, Exit Decisions, and Output," American Journal of Agricultural Economics, American Agricultural Economics Association, vol. 87(5), pages 1174-1181, November. [Downloadable!] (restricted)
  15. Sergio H. Lence & Ashok K. Mishra, 2003. "The Impacts of Different Farm Programs on Cash Rents," American Journal of Agricultural Economics, American Agricultural Economics Association, vol. 85(3), pages 753-761, 08. [Downloadable!] (restricted)
    Other versions:
  16. Bartolini, F. & Gallerani, V. & Raggi, M. & Viaggi, D., 2008. "Modelling The Effectiveness Of Cross-Compliance Under Asymmetric Information," 107th Seminar, January 30-February 1, 2008, Sevilla, Spain 6670, European Association of Agricultural Economists. [Downloadable!]
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Pavel Ciaian & Tomáš Ratinger, 2009. "Income Distribution Effects of EU Rural Development Policies: The Case of Farm Investment Support," EERI Research Paper Series EERI_RP_2009_01, Economics and Econometrics Research Institute (EERI). [Downloadable!]
  2. Pavel Ciaian & d'Artis Kancs, 2009. "The Capitalisation of Area Payments into Farmland Rents: Theory and Evidence from the New EU Member States," EERI Research Paper Series EERI_RP_2009_04, Economics and Econometrics Research Institute (EERI). [Downloadable!]
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