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Set‐Aside Premiums And The May 1992 Cap Reforms



This paper considers the linking of participation in the set‐aside programme to the receipt of a compensatory payment for proposed reductions in European Community price support announced in May 1992. It is shown that in this situation set‐aside premiums should lie between a lower bound sufficient to deter opting‐out in favour of full cropping, and an upper bound approximately equal to a level sufficient to induce voluntary participation in the programme. The initial level of Community price support and the extent of reductions from this level are shown to be the main factors determining the gap between the upper‐ and lower‐bound premiums. The impact of removing the compensatory payment system is also examined.

Suggested Citation

  • R. Fraser, 1993. "Set‐Aside Premiums And The May 1992 Cap Reforms," Journal of Agricultural Economics, Wiley Blackwell, vol. 44(3), pages 410-417, September.
  • Handle: RePEc:bla:jageco:v:44:y:1993:i:3:p:410-417
    DOI: 10.1111/j.1477-9552.1993.tb00283.x

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    References listed on IDEAS

    1. R.W. Fraser, 1991. "Price‐Support Effects On Ec Producers," Journal of Agricultural Economics, Wiley Blackwell, vol. 42(1), pages 1-10, January.
    2. Brown, Colin G, 1990. "Distributional Aspects of CAP Price Support," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 17(3), pages 289-301.
    3. A. J. Singh & D. Byerlee, 1990. "Relative Variability In Wheat Yields Across Countries And Over Time," Journal of Agricultural Economics, Wiley Blackwell, vol. 41(1), pages 21-32, January.
    4. Rulon D. Pope & Richard E. Just, 1991. "On Testing the Structure of Risk Preferences in Agricultural Supply Analysis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 73(3), pages 743-748.
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    Cited by:

    1. Moro, Daniele & Sckokai, Paolo, 1999. "Modelling the CAP Arable Crop Regime in Italy : Degree of Decoupling and Impact of Agenda 2000," Cahiers d'Economie et de Sociologie Rurales (CESR), Institut National de la Recherche Agronomique (INRA), vol. 53.
    2. Rob Fraser, 2009. "Land Heterogeneity, Agricultural Income Forgone and Environmental Benefit: An Assessment of Incentive Compatibility Problems in Environmental Stewardship Schemes," Journal of Agricultural Economics, Wiley Blackwell, vol. 60(1), pages 190-201, February.
    3. D. Roberts & J. Froud & R. W. Fraser, 1996. "Participation In Set Aside: What Determines The Opting In Price?," Journal of Agricultural Economics, Wiley Blackwell, vol. 47(1‐4), pages 89-98, January.
    4. Bourgeon, Jean-Marc & Jayet, Pierre-Alain & Picard, Pierre, 1995. "An incentive approach to land set-aside programs," European Economic Review, Elsevier, vol. 39(8), pages 1487-1509, October.
    5. Chang, Hung-Hao & Chen, Yu-Hui, 2011. "Are participators in the land retirement program likely to grow energy crops?," Applied Energy, Elsevier, vol. 88(9), pages 3183-3188.
    6. David Colman & Pavel Vavra, 2002. "The Optimal Allocation of Land between Alternative Support Schemes: an Exploration of Claims for Arable Area Payments," Journal of Agricultural Economics, Wiley Blackwell, vol. 53(2), pages 283-298, July.
    7. Hung-Hao Chang, 2017. "Does A Social Welfare Program Affect Farmland Use? Empirical Evidence Using Administrative Data in Taiwan," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 39(3), pages 441-457.
    8. Gracia, Azucena & de Magistris, Tiziana & Casado, Jose Maria, 2008. "The Effect Of The New Single Farm Payment In Irrigated Agriculture: The Case Of Spain," 107th Seminar, January 30-February 1, 2008, Sevilla, Spain 6590, European Association of Agricultural Economists.
    9. Moro, Daniele & Sckokai, Paolo, 1998. "Modelling The 1992 Cap Reform: Degree Of Decoupling And Future Scenarios," 1998 Annual meeting, August 2-5, Salt Lake City, UT 21015, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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