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Single Payments of the CAP: Where Do the Rents Go?

  • Stefan Kilian


  • Klaus Salhofer


    (Environmental Economics and Agricultural Policy Group, Technical University of Munich)

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    Based on a simple graphical model we analyze the effects of the introduction of the single payment scheme (SPS) in the EU in 2003 on land prices and the distribution of rents. In particular, we are interested in if the single payments are capitalized into agricultural land values. All three different ways to implement the SPS are discussed: the historical model, the regional model and the hybrid model. We show that the outcome crucially depends on the proportion of agricultural area to entitlements and which model is in place.

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    Paper provided by Technische Universität München, Environmental Economics and Agricultural Policy Group in its series Discussion Papers with number 012007.

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    Length: 20 pages
    Date of creation: 2007
    Date of revision: 2008
    Publication status: Published in Agricultural Economics Review, Vol. 9, No. 2, 96-106(revised version)
    Handle: RePEc:tuu:papers:012007
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