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Measuring Cross-Subsidisation Of The Single Payment Scheme In England


  • Renwick, Alan W.
  • Revoredo-Giha, Cesar


The specific purpose of this paper is to estimate the extent to which decoupled payments under the Single Payments Scheme (SPS) are being used (either explicitly or implicitly) in England to support the continuation of activities that were previously supported by area and headage payments. In the absence of a farm survey, the methodology consists of using information on farm accounts collected through England’s Farm Business Survey (FBS), to estimate a multi-output cost function differentiated by farm size and farm type. This cost function, calibrated to match regional prices in England, is used to estimate the level of cross-subsidisation in the first full year after implementation of the SPS (2005/06). Results indicate that cross-subsidisation was occurring, which might infer that many farmers across England are coupling their payments. Whilst, these results are for the first year, and in that sense may reflect a transitional situation, they are nevertheless important because they provide empirical evidence to inform the discussion concerning the impact and future development of the SPS.

Suggested Citation

  • Renwick, Alan W. & Revoredo-Giha, Cesar, 2008. "Measuring Cross-Subsidisation Of The Single Payment Scheme In England," 109th Seminar, November 20-21, 2008, Viterbo, Italy 44783, European Association of Agricultural Economists.
  • Handle: RePEc:ags:eaa109:44783

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    References listed on IDEAS

    1. Jeroen Buysse & Bruno Fernagut & Olivier Harmignie & Bruno Henry de Frahan & Ludwig Lauwers & Philippe Polomé & Guido Van Huylenbroeck & Jef Van Meensel, 2007. "Farm-based modelling of the EU sugar reform: impact on Belgian sugar beet suppliers," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 34(1), pages 21-52, March.
    2. Golan, Amos & Judge, George G. & Miller, Douglas, 1996. "Maximum Entropy Econometrics," Staff General Research Papers Archive 1488, Iowa State University, Department of Economics.
    3. Quirino Paris & Richard E. Howitt, 1998. "An Analysis of Ill-Posed Production Problems Using Maximum Entropy," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(1), pages 124-138.
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    Cited by:

    1. Renwick, Alan W. & Jansson, Torbjorn & Thomson, Steven & Revoredo-Giha, Cesar & Barnes, Andrew Peter, 2011. "The Economic Impact of allowing Partial Decoupling under the 2003 Common Agricultural Policy reforms on Scottish agriculture," Working Papers 131461, Scotland's Rural College (formerly Scottish Agricultural College), Land Economy & Environment Research Group.
    2. Esposti, Roberto, 2014. "The Impact of the 2005 CAP First Pillar Reform as a Multivalued Treatment Effect: Alternative Estimation Approaches," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 183067, European Association of Agricultural Economists.
    3. Roberto ESPOSTI, 2014. "To match, not to match, how to match: Estimating the farm-level impact of the CAP-first pillar reform (or: How to Apply Treatment-Effect Econometrics when the Real World is;a Mess)," Working Papers 403, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
    4. Esposti, Roberto, 2015. "To match, not to matchm how to match: Estimating the farm-level impact of the 2005 CAP-first pillar reform," 2015 Conference, August 9-14, 2015, Milan, Italy 211625, International Association of Agricultural Economists.

    More about this item


    English agriculture; single farm payment; micro-econometric models.; Agricultural and Food Policy; Research Methods/ Statistical Methods; Q12; Q18;

    JEL classification:

    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy

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