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Land Heterogeneity And The May 1992 Reform Of Cap Cereal Price Support

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This paper assesses the impact of the partial switch from price support towards compensatory payments of the May 1992 CAP cereal reform in the context of heterogeneous land quality. Two characteristics of land quality are identified: expected yield per hectare and the variability of yield per hectare. It is shown that the impact of the CAP reform on expected cereal income and the variability of cereal income is positive or negative depending on the level of each of these characteristics respectively. In particular, farmers with land which is both relatively low and unreliably yielding benefit from the CAP reform, while those with land which is both relatively high and reliably yielding lose from the CAP reform. The implications of these findings for the allocation of land between crops and livestock and the selling price of agricultural land are discussed.

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  • Rob Fraser, 1997. "Land Heterogeneity And The May 1992 Reform Of Cap Cereal Price Support," Journal of Agricultural Economics, Wiley Blackwell, vol. 48(1‐3), pages 65-70, January.
    • Handle: RePEc:bla:jageco:v:48:y:1997:i:1-3:p:65-70
    DOI: 10.1111/j.1477-9552.1997.tb01131.x
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    1. Hild Rygnestad & Rob Fraser, 1996. "Land Heterogeneity And The Effectiveness Of Cap Set‐Aside," Journal of Agricultural Economics, Wiley Blackwell, vol. 47(1‐4), pages 255-260, January.
    2. Fraser, Rob, 1994. "The Impact of Price Support on Set-Aside Responses to an Increase in Price Uncertainty," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 21(1), pages 131-136.
    3. Bruce Traill, 1979. "An empirical model of the U.K. land market and the impact of price policy on land values and rents," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 6(2), pages 209-232.
    4. T. A. Lloyd & A. J. Rayner, 1993. "Co‐Integration Analysis And The Determinants Of Land Prices: Comment," Journal of Agricultural Economics, Wiley Blackwell, vol. 44(1), pages 149-156, January.
    5. D. Roberts & J. Froud & R. W. Fraser, 1996. "Participation In Set Aside: What Determines The Opting In Price?," Journal of Agricultural Economics, Wiley Blackwell, vol. 47(1‐4), pages 89-98, January.
    6. Josling, Tim, 1994. "The Reformed CAP and the Industrial World," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 21(3-4), pages 513-527.
    7. D. Hallam, 1993. "Co‐Integration Analysis And The Determinants Of Land Prices: Reply," Journal of Agricultural Economics, Wiley Blackwell, vol. 44(1), pages 157-159, January.
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    1. Moro, Daniele & Sckokai, Paolo, 1999. "Modelling the CAP Arable Crop Regime in Italy : Degree of Decoupling and Impact of Agenda 2000," Cahiers d'Economie et de Sociologie Rurales (CESR), Institut National de la Recherche Agronomique (INRA), vol. 53.
    2. Rob Fraser, 2000. "Risk and Producer Compensation in the Agenda 2000 Cereal Reforms: A Note," Journal of Agricultural Economics, Wiley Blackwell, vol. 51(3), pages 468-472, September.

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