Possible economic and environmental impacts from changes to the coupled beef support payments for EU beef production

The Luxembourg agreement of 2005 marked a new direction for EU agriculture with the decoupling of direct support payments for production. Under the CAP reform of 2013, Member States had the option to retain an element of coupled support for agriculture. Building on a previous study from Jansson et al. (2018), this study analyses the regional effects for beef production resulting from a redistribution of voluntary coupled supports (VCS) through area payments in the national budgets. The redistribution of VCS payments is projected to result in a modest reduction in the income from beef production, the EU beef herd size as well as the total Greenhouse Gas (GHG) Emissions form EU beef production. However, these impacts vary across EU regions with some regions marginally increasing their beef production levels while other regions are projected to significantly reduce their beef meat activities. Especially Member States which had retained some form of VCS, a reduction in beef herd size and income is likely while those countries that had opted to fully decouple payments in 2005 are projected to show a slight increase in herd size and income. Generally, this leads to a decrease of the total GHG emissions, yet, an increase in GHG emission per livestock unit is seen due to a change in herd composition, production or feed intensity. From the results, it can be inferred that VCS payments for the beef sector have the potential to encourage beef production in regions where it may be less profitable to do so (negative income before the redistribution of VCS in the national budgets). Therefore, the decoupling of the remaining coupled supports within the CAP would likely lead to a minor restructuring of beef production within the EU.