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The Effect of Decoupling on Farming in Ireland: A Regional Analysis

Author

Listed:
  • Thia Hennessy

    (Rural Economy and Development Programme, Teagasc, Athenry, Co. Galway, Ireland)

  • Shailesh Shrestha

    (Rural Economy and Development Programme, Teagasc, Athenry, Co. Galway, Ireland)

  • Stephen Hynes

    (Rural Economy and Development Programme, Teagasc, Athenry, Co. Galway, Ireland)

Abstract

This paper uses Irish National Farm Survey and Census of Agriculture data to analyse the regional implications of the decoupling of direct payments for farmers in Ireland. A mathematical programming model is used to estimate the regional effects of decoupling while a microsimulation model is exploited to map the geographic distribution of decoupled payments. The results show that under the historical decoupling scheme, milk quota will shift from less efficient to larger more efficient farms in all regions. Beef cattle numbers are projected to decrease on all farms with the exception of the mid-east and south-east regions where farmers are projected to increase animal numbers. The regional effect of decoupling on sheep farming is marginal with all regions projected to benefit from the policy change. The analysis also shows, using a static microsimulation model, that a shift to a flat rate national calculation of the decoupled payment would result in a significant movement of revenues from the southeast of the country to the northwest. In particular, large beef and dairy farmers in the south would lose out while small dairy and sheep farmers in the west and northwest would be most likely to gain.

Suggested Citation

  • Thia Hennessy & Shailesh Shrestha & Stephen Hynes, 2006. "The Effect of Decoupling on Farming in Ireland: A Regional Analysis," Working Papers 0611, Rural Economy and Development Programme,Teagasc.
    • Handle: RePEc:tea:wpaper:0611
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    References listed on IDEAS

    as
    1. Beard, Nick & Swinbank, Alan, 2001. "Decoupled payments to facilitate CAP reform," Food Policy, Elsevier, vol. 26(2), pages 121-145, April.
    2. Breen, James P. & Hennessy, Thia C. & Thorne, Fiona S., 2005. "The effect of decoupling on the decision to produce: An Irish case study," Food Policy, Elsevier, vol. 30(2), pages 129-144, April.
    3. Stephen Hynes & Karyn Morrissey & Cathal O’Donoghue, 2005. "Building a Static Farm Level Spatial Microsimulation Model: Statistically Matching the Irish National Farm Survey to the Irish Census of Agriculture," Working Papers 0506, Rural Economy and Development Programme,Teagasc.
    4. Rey, Bernard & Das, Sachindra M., 1997. "A systems analysis of inter-annual changes in the pattern of sheep flock productivity in Tanzanian livestock research centres," Agricultural Systems, Elsevier, vol. 53(2-3), pages 175-190.
    5. Swinbank, Alan & Tranter, Richard B., 2005. "Decoupling EU Farm Support: Does the New Single Payment Scheme Fit within the Green Box?," Estey Centre Journal of International Law and Trade Policy, Estey Centre for Law and Economics in International Trade, vol. 6(01), pages 1-15.
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    Cited by:

    1. Shrestha, Shailesh & Hennessy, Thia & Abdalla, Mohamed & Forristal, Dermot & Jones, Michael B., 2014. "Determining Short Term Responses of Irish Dairy Farms under Climate Change," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 63(03), pages 1-13, September.
    2. Eory, Vera & MacLeod, Michael & Shrestha, Shailesh & Roberts, David, 2014. "Linking an Economic and a Life-cycle Analysis Biophysical Model to Support Agricultural Greenhouse Gas Mitigation Policy," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 63(03), pages 1-10, September.
    3. Shrestha, Shailesh & Hennessy, Thia & Abdalla, Mohamed & Forristal, Dermot & Jones, Michael B., 2014. "Determining Short Term Responses of Irish Dairy Farms under Climate Change," Journal of International Agricultural Trade and Development, Journal of International Agricultural Trade and Development, vol. 63(3).
    4. Cathal O'Donoghue & Thia Hennessy, 2015. "Policy and Economic Change in the Agri-Food Sector in Ireland," The Economic and Social Review, Economic and Social Studies, vol. 46(2), pages 315-337.
    5. 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.
    6. Helming, John F.M. & Peerlings, Jack H.M., 2012. "Economic and environmental effects of an EU flat rate for the Dutch agricultural sector," 123rd Seminar, February 23-24, 2012, Dublin, Ireland 122481, European Association of Agricultural Economists.
    7. O’Donoghue, Cathal & McKinstry, Alistair & Green, Stuart & Fealy, Reamonn & Heanue, Kevin & Ryan, Mary & Connolly, Kevin & Desplat, J.C. & Horan, Brendan, 2016. "A Blueprint for a Big Data Analytical Solution to Low Farmer Engagement with Financial Management," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 19(A), pages 1-24, June.
    8. Cathal O'Donoghue & Karyn Morrissey & John Lennon, 2014. "Spatial Microsimulation Modelling: a Review of Applications and Methodological Choices," International Journal of Microsimulation, International Microsimulation Association, vol. 7(1), pages 26-75.
    9. Jason Loughrey & Fiona Thorne & Thia Hennessy, 2016. "A Microsimulation Model for Risk in Irish Tillage Farming," International Journal of Microsimulation, International Microsimulation Association, vol. 9(2), pages 41-76.
    10. Norton, Daniel & Hynes, Stephen & Buckley, Cathal & Ryan, Mary & Doherty, Edel, 2020. "Estimating the value of agroecosystem services in Ireland’s catchments," Working Papers 309504, National University of Ireland, Galway, Socio-Economic Marine Research Unit.
    11. Eory, Vera & MacLeod, Michael & Shrestha, Shailesh & Roberts, David, 2014. "Linking an Economic and a Life-cycle Analysis Biophysical Model to Support Agricultural Greenhouse Gas Mitigation Policy," Journal of International Agricultural Trade and Development, Journal of International Agricultural Trade and Development, vol. 63(3).

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