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EU-Wide (Regional and Farm Level) Effects of Premium Decoupling and Harmonisation Following the Health Check Reform

Author

Listed:
  • Britz, Wolfgang
  • Gocht, Alexander
  • Domínguez, Ignacio Pérez
  • Jansson, Torbjörn
  • Grosche, Stephanie-Carolin
  • Zhao, Na

Abstract

This article investigates the income effects of decoupled payments distributed at the farm-type or uniformly at the regional level within the European Union. The analysis was conducted using detailed information on the implementation of the Health Check policy package for agricultural activities in each of the 27 member states, which is included in the Common Agricultural Policy Regionalised Impact (CAPRI) model. In the simulation experiments, the transition from individual to uniform per-hectare rates at the country level was explicitly modelled. The results show significant income shifts only for single products, such as durum wheat. Moreover, income was redistributed away from traditional “Grandes Cultures” crop production to fodder production, an effect primarily caused by the capitalisation of decoupled premiums on previously unsubsidised land. Cattle, sheep and goat production was primarily affected in the animal sector. Land values are expected to increase considerably, especially those of grasslands. Der Artikel untersucht die Einkommenswirkungen von entkoppelten Zahlungen, die nach Betriebstypen oder einheitlich auf regionaler Ebene der Europäischen Union verteilt werden. Die Analyse wird durchgeführt basierend auf detaillierten Informationen über die Implementierung des Health-Check-Reform-Paketes pro landwirtschaftlicher Aktivität in jeder der 27 Mitgliedstaaten, die dann im CAPRI (Common Agricultural Policy Regionalized Impact)-Modell einfließen. In den Szenarien wird der Übergang von individuellen zu einheitlichen Hektarprämien auf der Ebene der Mitgliedsländer explizit modelliert. Ergebnisse zeigen signifikante Einkommensänderungen nur für einzelne Produkte wie Hartweizen. Außerdem wird Einkommen von den traditionellen Grandes Cultures zum Futterbau umverteilt, ein Effekt, der hauptsächlich durch die Kapitalisierung der entkoppelten Zahlungen von Land, welches vorher nicht subventioniert war, zustande kommt. Im tierischen Sektor sind besonders Rindfleisch, Schafe und Ziegenproduktion betroffen. Es wird erwartet, dass Landrenten deutlich steigen, insbesondere für Grünland.

Suggested Citation

  • Britz, Wolfgang & Gocht, Alexander & Domínguez, Ignacio Pérez & Jansson, Torbjörn & Grosche, Stephanie-Carolin & Zhao, Na, 2012. "EU-Wide (Regional and Farm Level) Effects of Premium Decoupling and Harmonisation Following the Health Check Reform," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 61(01), pages 1-13, February.
    • Handle: RePEc:ags:gjagec:199771
    DOI: 10.22004/ag.econ.199771
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    References listed on IDEAS

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