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Modelling CAP Decoupling in the EU: A Comparison of Selected Simulation Models and Results

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  • Oliver Balkhausen
  • Martin Banse
  • Harald Grethe

Abstract

This article reviews ways of representing the effects of decoupling in the European Union (EU) on land allocation and production in eight selected simulation models (AGLINK, AG‐MEMOD, CAPRI, CAPSIM, ESIM, FAPRI, GOAL and GTAP). It then compares the simulated effects of decoupling and traces them back to the model specifications and parameter assumptions. In particular, roughage is not included in most models, so that changes in ruminant production are not necessarily consistent with the changes in fodder area. Models also differ in the extent to which they reflect the substitution possibilities in ruminant feeds. Notwithstanding the considerable differences in model types and specifications, all the studies considered here predict that as a result of decoupling, areas allocated to cereals (and silage maize) and beef and sheep production in the EU‐15 will decline, while fodder area will increase. Differences in the projections about pasture, oilseed and set‐aside areas can be attributed to different model or scenario specifications. The most important factor affecting the results is the extent to which the models assume that the Common Agricultural Policy (CAP) 2003 Reform (regarding Single Farm Payments) involves a substantial decoupling of support compared with the baseline (Agenda 2000) policy.

Suggested Citation

  • Oliver Balkhausen & Martin Banse & Harald Grethe, 2008. "Modelling CAP Decoupling in the EU: A Comparison of Selected Simulation Models and Results," Journal of Agricultural Economics, Wiley Blackwell, vol. 59(1), pages 57-71, February.
    • Handle: RePEc:bla:jageco:v:59:y:2008:i:1:p:57-71
    DOI: 10.1111/j.1477-9552.2007.00135.x
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    1. Unknown, 2003. "Decoupled Payments: Household Income Transfers In Contemporary U.S. Agriculture," Agricultural Economic Reports 34057, United States Department of Agriculture, Economic Research Service.
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