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Policy assessment of an EU wide flat area CAP payments system

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  • 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

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    1. Salamon, Petra & Chantreuil, Frederic & Donnellan, Trevor & Erjavec, Emil & Esposti, Roberto & Hanrahan, Kevin F. & van Leeuwen, Myrna & Salputra, Guna, 2008. "Linking Large Numbers of Individual National Models: The Case of the AGMEMOD Partnership," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 43539, European Association of Agricultural Economists.
    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(08), pages 1-6.
    3. 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(1), pages 1-22, March.
    4. 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.
    5. 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(2), pages 235-261, March.
    6. 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.
    7. Allan Buckwell, 2007. "The Next Steps in CAP Reform Les prochaines étapes de la réforme de la PAC Die nächsten Schritte in der Reform der GAP," EuroChoices, The Agricultural Economics Society, vol. 6(2), pages 13-19, August.
    8. 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(1), pages 1-22, March.
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    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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    3. 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.
    4. Mugurel Ionel JITEA & Diana Elena DUMITRAȘ & Vasile Alexandru SIMU, 2015. "An ex-ante impact assessment of the Common Agricultural Policy reform in the North-Western Romania," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 61(2), pages 88-103.
    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.
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    7. Jana Lososová & Jaroslav Svoboda, 2013. "Changes in direct payments after 2013 in the Czech agrarian sector," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 61(2), pages 393-404.
    8. Jana Vavřina & Kamila Růžičková & Dana Martinovičová, 2012. "The CAP reform beyond 2013: the economic performance of agricultural enterprises within the Visegrad Group," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 60(7), pages 451-462.
    9. Banse, Martin & Janzen, Niels & Junker, Franziska & Kreins, Peter & Offermann, Frank & Salamon, Petra & Weimar, Holger, 2016. "Modelling the Bioeconomy: Linkages between Agricultural, Wood and Energy Markets," Conference papers 332764, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
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    13. Miguel Viegas & Jan Wolf & Francisco Cordovil, 2023. "Assessment of inequality in the Common Agricultural Policy in Portugal," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 11(1), pages 1-15, December.
    14. Dimitrios Kremmydas & Konstantinos Tsiboukas, 2022. "Redistribution and the Abolishment of Historical Entitlements in the CAP Strategic Plans: The Case of Greece," Sustainability, MDPI, vol. 14(2), pages 1-14, January.
    15. Roel Jongeneel & Siemen Berkum & Hans Vrolijk, 2016. "Summary," EuroChoices, The Agricultural Economics Society, vol. 15(2), pages 26-33, August.
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    17. 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.
    18. Stefano Ciliberti & Angelo Frascarelli, 2018. "The CAP 2013 reform of direct payments: redistributive effects and impacts on farm income concentration in Italy," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 6(1), pages 1-18, December.

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