Structural, efficiency and income effects of direct payments: an analysis of different payment schemes for the German region 'Hohenlohe'

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Structural, efficiency and income effects of direct payments: an analysis of different payment schemes for the German region 'Hohenlohe'

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Kathrin Happe (Institute of Agricultural Development in Central and Eastern Europe IAMO)
Alfons Balmann (Institute of Agricultural Development in Central and Eastern Europe IAMO)
Konrad Kellermann

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Abstract

The objective of this paper is to work out some fundamental dynamic effects on agricultural structure, farm incomes, and efficiency that result from decoupled income payments, the transfer of payments together with a progressive payment cut. To do so, we apply the agent-based model AgriPoliS (Agri-cultural Policy Simulator). AgriPoliS is a normative spatial and dynamic model of regional agricul-tural structures that takes account of actions and interactions between a large number of individually acting farms. The model is calibrated to the region 'Hohenlohe' in Baden-Württemberg which is char-acterised by intensive livestock farming on the plains and extensive cattle and dairy farming in more remote valleys. The policy simulations show that impacts on structural change, competitiveness, and income distribution vary greatly depending on how the policy scheme is implemented. If direct pay-ments are completely decoupled from land use (no obligation to farm land) this has significant and lasting effects on the competitiveness of agriculture, structural change, farmers’ incomes and land-use.

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Paper provided by EconWPA in its series Others with number 0308001.

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Date of creation: 08 Aug 2003
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Handle: RePEc:wpa:wuwpot:0308001

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Find related papers by JEL classification:
C63 - Mathematical and Quantitative Methods - - Mathematical Methods and Programming - - - Computational Techniques
R14 - Urban, Rural, and Regional Economics - - General Regional Economics - - - Land Use Patterns
Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy

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Balmann, Alfons, 1997. "Farm-Based Modelling of Regional Structural Change: A Cellular Automata Approach," European Review of Agricultural Economics, Oxford University Press for the Foundation for the European Review of Agricultural Economics, vol. 24(1), pages 85-108.

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