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Policy assessment of an EU wide flat area CAP payments system

Author

Listed:
  • Erjavec, Emil
  • Chantreuil, Frédéric
  • Hanrahan, Kevin
  • Donnellan, Trevor
  • Salputra, Guna
  • Kozar, Maja
  • van Leeuwen, Myrna

Abstract

While the evolution of the Common Agricultural Policy (CAP) until 2013 is clear, European Union (EU) budgetary pressures and the perceived unfairness of the distribution of CAP support across Member States has lead to uncertainty over the design of the CAP post 2013. One comprehensive reform option being considered is the implementation of an EU wide flat area payment (EUWFAP) system and a reduction of the total budget available for direct payments. It is hypothesised that the implementation of this policy proposal would lead to significant changes in the distribution of the EU budget and to the redistribution of agricultural production between the Member States, which could hinder the implementation of the proposal. This paper evaluates the rationality of the EUWFAP, based on the analysis of its budgetary and market impacts. Using the AGMEMOD 2020 combined model, the introduction of the EUWFAP in 2013 is compared with a baseline continuation of the current policy. Results suggest that there would be minor negative impacts on the agricultural production at the EU level, but that more substantial impact for some commodities, most notably beef, and could occur in the individual EU Member States. An important outcome of such a policy reform would be a substantial change in the budget allocation between Member States, which could help mitigate the budgetary tensions between the Member States.

Suggested Citation

  • Erjavec, Emil & Chantreuil, Frédéric & Hanrahan, Kevin & Donnellan, Trevor & Salputra, Guna & Kozar, Maja & van Leeuwen, Myrna, 2011. "Policy assessment of an EU wide flat area CAP payments system," Economic Modelling, Elsevier, vol. 28(4), pages 1550-1558, July.
  • Handle: RePEc:eee:ecmode:v:28:y:2011:i:4:p:1550-1558
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    References listed on IDEAS

    as
    1. Arlindo Cunha & Alan Swinbank, 2009. "Exploring the Determinants of CAP Reform: A Delphi Survey of Key Decision-Makers," Journal of Common Market Studies, Wiley Blackwell, vol. 47, pages 235-261, March.
    2. Salamon, Petra & Chantreuil, Frederic & Donnellan, Trevor & Erjavec, Emil & Esposti, Roberto & Hanrahan, Kevin F. & van Leeuwen, Myrna & Bouma, Foppe & Dol, Wietse & Salputra, Guna, 2008. "How to deal with the challenges of linking a large number of individual national models: the case of the AGMEMOD Partnership," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 57(8), pages 1-6.
    3. Yrjola, Tapani & Kola, Jukka, 2004. "Consumer Preferences Regarding Multifunctional Agriculture," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 7(2), pages 1-13.
    4. repec:oup:revage:v:30:y:2008:i:1:p:27-42. is not listed on IDEAS
    5. Allan Buckwell, 2007. "The Next Steps in CAP Reform," EuroChoices, The Agricultural Economics Society, vol. 6(2), pages 13-19, August.
    6. Keith H. Coble & J. Corey Miller & M. Darren Hudson, 2008. "Decoupled Farm Payments and Expectations for Base Updating," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 30(1), pages 27-42.
    7. Carsten Daugbjerg & Alan Swinbank, 2007. "The Politics of CAP Reform: Trade Negotiations, Institutional Settings and Blame Avoidance," Journal of Common Market Studies, Wiley Blackwell, vol. 45, pages 1-22, March.
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    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Production effects of moving to flatter structure of direct payments
      by Alan Matthews in CAP Reform.eu on 2011-09-30 15:28:51

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    Cited by:

    1. Cathal O'Donoghue & Thia Hennessy, 2014. "Chapter 03: The Agri-Food Sector," Chapters from Rural Economic Development in Ireland,in: Rural Economic Development in Ireland, edition 1, chapter 3 Rural Economy and Development Programme,Teagasc.
    2. Chatellier, Vincent & Guyomard, Herve, 2012. "The October 2011 Legislative Proposals for CAP Reform: A French Point of View," 126th Seminar, June 27-29, 2012, Capri, Italy 126988, European Association of Agricultural Economists.
    3. Rezbova, Helena & Tomsík, Karel, 2012. "Impact of Complementary National Direct Payments on Cattle Breeding Sector," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 4(4 Special), pages 1-11, December.
    4. 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.
    5. Galluzzo, Nicola, 2018. "A quantitative analysis of the CAP towards rural Romanian areas," 162nd Seminar, April 26-27, 2018, Budapest, Hungary 271963, European Association of Agricultural Economists.
    6. Roel Jongeneel & Siemen Berkum & Hans Vrolijk, 2016. "Summary," EuroChoices, The Agricultural Economics Society, vol. 15(2), pages 26-33, August.
    7. repec:mup:actaun:actaun_2013061020393 is not listed on IDEAS
    8. repec:mup:actaun:actaun_2012060070451 is not listed on IDEAS
    9. Petra Salamon & Martin Banse & Jesus Barreiro Hurle & Ondrej Chaloupka & Trevor Donnellan & Emil Erjavec & Thomas Fellmann & Kevin Hanrahan & Marlen Hass & Roel Jongeneel & Verena Laquai & Myrna van L, 2017. "Unveiling diversity in agricultural markets projections: from EU to Member States. A medium-term outlook with the AGMEMOD model," JRC Working Papers JRC109115, Joint Research Centre (Seville site).
    10. Blanco, Maria & Garcia-German, Sol & Bardaji, Isabel, 2011. "El modelo de ayudas directas en la PAC post-2013: análisis de impactos de escenarios potenciales," Economia Agraria y Recursos Naturales, Spanish Association of Agricultural Economists, vol. 11(02), pages 1-26, December.
    11. Stanković, Milica, 2014. "Agricultural Franchising And Contribution To Achieving Objectives Of The Eu Common Agricultural Policy," Economics of Agriculture, Institute of Agricultural Economics, vol. 61(4), pages 1-15, December.
    12. repec:spr:agfoec:v:6:y:2018:i:1:d:10.1186_s40100-018-0113-5 is not listed on IDEAS

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