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Static and Dynamic Distributional Effects of Decoupled Payments: Single Farm Payments in the European Union

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  • Pavel Ciaian
  • d'Artis Kancs
  • Johan F.M. Swinnen

Abstract

This paper analyses the distributional effects of decoupled Single Farm Payments (SFP) in the European Union. In a static world the SFP benefit only farmers, irrespective of the implemented SFP model and irrespective of whether entitlements are tradable or not, except when the size of the allocated entitlements is larger than the eligible area and/or if entrants are eligible for the SFP. Then the SFP gets either partially or fully capitalized into land values and landowners benefit. In a dynamic world the effects depend on the nature of structural change, on the tradability of entitlements, and on the implementation model.

Suggested Citation

  • Pavel Ciaian & d'Artis Kancs & Johan F.M. Swinnen, 2008. "Static and Dynamic Distributional Effects of Decoupled Payments: Single Farm Payments in the European Union," LICOS Discussion Papers 20708, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
  • Handle: RePEc:lic:licosd:20708
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    More about this item

    Keywords

    Land market; agricultural policy rents; decoupled subsidies; land capitalization;
    All these keywords.

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • D30 - Microeconomics - - Distribution - - - General
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • 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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