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Calculating The Rate Of Decoupling For Crops Under Cap/Oilseeds Reform

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  • Sean A. Cahill

Abstract

The model presented in this paper measures the rate of decoupling achieved by the compensatory payments package provided under ‘CAP/Oilseeds Reform’ legislation. Results from the model suggest that, contrary to expectations, we may view the compensatory payments as ‘effectively fully decoupled’ from production of wheat, rapeseed and soybeans. Three factors drive this result. First, when compared with base period returns, the compensatory payments ‘skew’ crop revenue per hectare. Second, the set–aside and ‘Blair House accord’ area restrictions on the model ensure effective full decoupling for rapeseed and soybeans. (Without these restrictions, the payments package is only partially decoupled from production of these crops.) Finally, as currently designed, the model does not allow land To leave crop production; thus, if area in one crop decreases in response to changes in prices and/or payments, area in at least one other crop must increase. For coarse grains and sunflower, the model generates decoupling rates of 80 per cent and 70 per cent respectively, suggesting partial decoupling of the payments package from production of these crops.

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  • Sean A. Cahill, 1997. "Calculating The Rate Of Decoupling For Crops Under Cap/Oilseeds Reform," Journal of Agricultural Economics, Wiley Blackwell, vol. 48(1‐3), pages 349-378, January.
  • Handle: RePEc:bla:jageco:v:48:y:1997:i:1-3:p:349-378
    DOI: 10.1111/j.1477-9552.1997.tb01159.x
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    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. Sahrbacher, Christoph, 2011. "Regional structural change in European agriculture: Effects of decoupling and EU accession," Studies on the Agricultural and Food Sector in Transition Economies, Leibniz Institute of Agricultural Development in Transition Economies (IAMO), volume 60, number 60, June.
    3. Urban, Kirsten & Jensen, Hans G. & Brockmeier, Martina, 2016. "How decoupled is the Single Farm Payment and does it matter for international trade?," Food Policy, Elsevier, vol. 59(C), pages 126-138.
    4. Lelyon, Baptiste & Chatelier, Vincent & Daniel, Karine, 2011. "Decoupling and prices: determinant of dairy farmers’ choices?," Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement (RAEStud), Institut National de la Recherche Agronomique (INRA), vol. 92(1).
    5. Frederic Courleux & Herve Guyomard & Fabrice Levert, 2007. "Étude prospective sur le fonctionnement des marchés des droits au paiement et de la réserve nationale mis en place dans le cadre de la réforme de la PAC de juin 2003," Working Papers hal-01595356, HAL.
    6. Yves Dronne & Patrice Gautier & Alexandre Gohin & Fabrice Levert, 2003. "OLEOSIM : modélisation du marché mondial des oléagineux," Working Papers hal-02827533, HAL.
    7. Pavel Ciaian & d'Artis Kancs & Jo Swinnen, 2008. "Static and Dynamic Distributional Effects of Decoupled Payments," Journal of Economics and Econometrics, Economics and Econometrics Society, vol. 51(2), pages 20-47.
    8. 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.
    9. Pavel Ciaian & d’Artis Kancs & Johan Swinnen, 2010. "EU Land Markets and the Common Agricultural Policy," Journal of Economics and Econometrics, Economics and Econometrics Society, vol. 53(3), pages 1-31.
    10. Manos, Basil & Bournaris, Thomas & Papathanasiou, Jason & Chatzinikolaou, Parthena, 2009. "Evaluation of tobacco cultivation alternatives under the EU common agricultural policy (CAP)," Journal of Policy Modeling, Elsevier, vol. 31(2), pages 225-238.
    11. 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).
    12. 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.
    13. Bhaskar, Arathi & Beghin, John C., 2007. "How Coupled are Decoupled Farm Payments? A Review of Coupling Mechanisms and the Evidence," Working Papers 7347, Iowa State University, Department of Economics.
    14. Swinbank, Alan & Tranter, Richard B., 2005. "Decoupling EU Farm Support: Does the New Single Payment Scheme Fit within the Green Box?," Estey Centre Journal of International Law and Trade Policy, Estey Centre for Law and Economics in International Trade, vol. 6(1), pages 1-15.
    15. James Rude, 2008. "Production Effects of the European Union's Single Farm Payment," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 56(4), pages 457-471, December.
    16. Biagini Luigi & Simone Severini, 2021. "The role of Common Agricultural Policy (CAP) in enhancing and stabilising farm income: an analysis of income transfer efficiency and the Income Stabilisation Tool," Papers 2104.14188, arXiv.org.
    17. Luigi Biagini & Federico Antonioli & Simone Severini, 2020. "The Role of the Common Agricultural Policy in Enhancing Farm Income: A Dynamic Panel Analysis Accounting for Farm Size in Italy," Journal of Agricultural Economics, Wiley Blackwell, vol. 71(3), pages 652-675, September.
    18. Binfield, Julian & Meyers, William H. & Westhoff, Patrick, 2005. "Challenges of Incorporating EU Enlargement and CAP Reform in the GOLD Model Framework," 89th Seminar, February 2-5, 2005, Parma, Italy 231835, European Association of Agricultural Economists.
    19. Gohin, Alexandre & Guyomard, Hervé, 2000. "The Agenda 2000 CAP Reform in the WTO Context: Distortion Effects of Compensatory Payments and Area Set-aside Requirements," 2000 Conference, August 13-18, 2000, Berlin, Germany 197222, International Association of Agricultural Economists.
    20. Halmai, Peter & Elekes, Andrea, 2005. "Declining "Common" Agricultural Policy? CAP Reform of 2003 and Its National Implementation in the Member States," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24480, European Association of Agricultural Economists.
    21. Daniel Chami & Alessandra Scardigno & Giulio Malorgio, 2011. "Impacts of Combined Technical and Economic Measures on Water Saving in Agriculture under Water Availability Uncertainty," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 25(14), pages 3911-3929, November.
    22. Catherine Benjamin & Magalie Houée Bigot, 2006. "The impact on yields of arable crops of moving from price support to area payements: A Study of the 1992 CAP Reform: n° 423," Post-Print hal-01931561, HAL.

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