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A Bayesian econometrics and risk programming approach for analysing the impact of decoupled payments in the European Union

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  • Shyam Kumar Basnet
  • Torbjörn Jansson
  • Thomas Heckelei

Abstract

We estimate a risk‐based programming, individual farm model and apply it to study the wealth effects of crop‐related, decoupled direct payments under the European Union (EU) Common Agricultural Policy. The model expands on previous work on estimating risk‐based programming models by applying a robust Bayesian econometric framework. The results indicate that the wealth effect varies greatly between individual farms, but that its impact on aggregate crop production is small. For larger farms, in particular, removing the decoupled payments, while keeping total land constant, increases the diversity of the cropping plan.

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  • Shyam Kumar Basnet & Torbjörn Jansson & Thomas Heckelei, 2021. "A Bayesian econometrics and risk programming approach for analysing the impact of decoupled payments in the European Union," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 65(3), pages 729-759, July.
    • Handle: RePEc:bla:ajarec:v:65:y:2021:i:3:p:729-759
    DOI: 10.1111/1467-8489.12430
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    2. Kamel Louhichi & Daël Merisier, 2023. "Potential impacts of the Income Stabilisation Tool on farmers' income and crop diversity: a French case study [Impacts potentiels de l'outil de stabilisation des revenus sur les revenus des agricul," Post-Print hal-04195630, HAL.
    3. Kamel Louhichi & Daël Merisier, 2024. "Potential impacts of the Common Agricultural Policy's Income Stabilisation Tool on farmers' incomes and crop diversity: A French case study," Journal of Agricultural Economics, Wiley Blackwell, vol. 75(2), pages 716-739, June.
    4. Konstantinos Ziliaskopoulos & Konstantinos Papalamprou, 2022. "A Bilevel Linear Programming Model for Developing a Subsidy Policy to Minimize the Environmental Impact of the Agricultural Sector," Sustainability, MDPI, vol. 14(13), pages 1-10, June.

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