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Regional impacts of abolishing direct payments: An integrated analysis in four European regions

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  • Uthes, Sandra
  • Piorr, Annette
  • Zander, Peter
  • Bienkowski, Jerzy
  • Ungaro, Fabrizio
  • Dalgaard, Tommy
  • Stolze, Matthias
  • Moschitz, Heidrun
  • Schader, Christian
  • Happe, Kathrin
  • Sahrbacher, Amanda
  • Damgaard, Martin
  • Toussaint, Verena
  • Sattler, Claudia
  • Reinhardt, Franz-Josef
  • Kjeldsen, Chris
  • Casini, Leonardo
  • Müller, Klaus

Abstract

The direct payment system of the Common Agricultural Policy (CAP) provides income transfers to European farmers. Recently, several countries including England and Sweden have advocated the elimination of direct payments after 2013. The extent to which an elimination of direct payments would affect the land use dynamics in Europe including impacts on structural change and the environment has not been addressed in the existing literature. In this paper, we combine participatory methods, to analyze regional preferences for functions and effects of agriculture, and farm-level modeling, to assess the impacts of such a policy change on farm structures and land use intensities in four European regions located in Germany, Denmark, Italy and Poland, each with different socio-economic and biophysical characteristics. In each region, the entire farm population consisting of different farm types with different production orientations and land management types was modeled under the presence and absence of direct payments using a combination of agent-based and bio-economic modeling. We found that the initial characteristics of the regions, such as the historical farm structure and regional site conditions, greatly influence the impact of direct support elimination and cause regionally different development trends. The results for the four regions were summarized in four specific storylines that emphasize how much the diversity of European regions matters for future policy decisions. An explicitly regional focus is, therefore, argued to be crucial to complement future policy analysis.

Suggested Citation

  • Uthes, Sandra & Piorr, Annette & Zander, Peter & Bienkowski, Jerzy & Ungaro, Fabrizio & Dalgaard, Tommy & Stolze, Matthias & Moschitz, Heidrun & Schader, Christian & Happe, Kathrin & Sahrbacher, Amand, 2011. "Regional impacts of abolishing direct payments: An integrated analysis in four European regions," Agricultural Systems, Elsevier, vol. 104(2), pages 110-121, February.
  • Handle: RePEc:eee:agisys:v:104:y:2011:i:2:p:110-121
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    6. Fastelli, Laura & Landi, Chiara & Rovai, Massimo & Andreoli, Maria, 2017. "A spatial analysis of terrain features and farming styles in a disadvantaged area of Tuscany (Mugello): implications for the evaluation and the design of CAP payments," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), vol. 6(1), May.
    7. Ciliberti, Stefano & Frascarelli, Angelo, 2015. "A critical assessment of the implementation of CAP 2014- 2020 direct payments in Italy," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), vol. 4(3), pages 1-17, December.
    8. Svoboda, J. & Lososová, Jana & Zdeněk, R., 2015. "Analysis of Operating Costs of Subsidies in the Field of Agriculture of EU Countries," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 7(4), pages 1-13, December.
    9. Happe, K. & Hutchings, N.J. & Dalgaard, T. & Kellerman, K., 2011. "Modelling the interactions between regional farming structure, nitrogen losses and environmental regulation," Agricultural Systems, Elsevier, vol. 104(3), pages 281-291, March.
    10. Loizou, Efstratios & Karelakis, Christos & Galanopoulos, Konstantinos & Mattas, Konstadinos, 2019. "The role of agriculture as a development tool for a regional economy," Agricultural Systems, Elsevier, vol. 173(C), pages 482-490.
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    13. Marius Michels & Johannes Möllmann & Oliver Musshoff, 2020. "German Farmers’ Perspectives on Direct Payments in the Common Agricultural Policy," EuroChoices, The Agricultural Economics Society, vol. 19(1), pages 48-52, April.

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