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Structural, efficiency and income effects of direct payments: an analysis of different payment schemes for the German region 'Hohenlohe'


  • Kathrin Happe

    (Institute of Agricultural Development in Central and Eastern Europe IAMO)

  • Alfons Balmann

    (Institute of Agricultural Development in Central and Eastern Europe IAMO)

  • Konrad Kellermann


The objective of this paper is to work out some fundamental dynamic effects on agricultural structure, farm incomes, and efficiency that result from decoupled income payments, the transfer of payments together with a progressive payment cut. To do so, we apply the agent-based model AgriPoliS (Agri-cultural Policy Simulator). AgriPoliS is a normative spatial and dynamic model of regional agricul-tural structures that takes account of actions and interactions between a large number of individually acting farms. The model is calibrated to the region 'Hohenlohe' in Baden-Württemberg which is char-acterised by intensive livestock farming on the plains and extensive cattle and dairy farming in more remote valleys. The policy simulations show that impacts on structural change, competitiveness, and income distribution vary greatly depending on how the policy scheme is implemented. If direct pay-ments are completely decoupled from land use (no obligation to farm land) this has significant and lasting effects on the competitiveness of agriculture, structural change, farmers’ incomes and land-use.

Suggested Citation

  • Kathrin Happe & Alfons Balmann & Konrad Kellermann, 2003. "Structural, efficiency and income effects of direct payments: an analysis of different payment schemes for the German region 'Hohenlohe'," Others 0308001, EconWPA.
  • Handle: RePEc:wpa:wuwpot:0308001
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    References listed on IDEAS

    1. Happe, Kathrin & Balmann, Alfons, 2002. "Struktur-, Effizienz- und Einkommenswirkungen von Direktzahlungen," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 51(8).
    2. Berger, Thomas, 2001. "Agent-based spatial models applied to agriculture: a simulation tool for technology diffusion, resource use changes and policy analysis," Agricultural Economics, Blackwell, vol. 25(2-3), pages 245-260, September.
    3. Balmann, Alfons, 1997. "Farm-Based Modelling of Regional Structural Change: A Cellular Automata Approach," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 24(1), pages 85-108.
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    Cited by:

    1. Dimitris Kremmydas, 2012. "Agent based modeling for agricultural policy evaluation: A review," Working Papers 2012-3, Agricultural University of Athens, Department Of Agricultural Economics.

    More about this item


    agricultural policy analysis; agent-based models; decoupling;

    JEL classification:

    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy


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