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Regional impacts of abolishing direct payments: An integrated analysis in four European regions

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  • Uthes, Sandra
  • Piorr, Annette
  • Zander, Peter
  • Bienkowski, Jerzy
  • Ungaro, Fabrizio
  • Dalgaard, Tommy
  • Stolze, Matthias
  • Moschitz, Heidrun
  • Schader, Christian
  • Happe, Kathrin
  • Sahrbacher, Amanda
  • Damgaard, Martin
  • Toussaint, Verena
  • Sattler, Claudia
  • Reinhardt, Franz-Josef
  • Kjeldsen, Chris
  • Casini, Leonardo
  • Müller, Klaus

Abstract

The direct payment system of the Common Agricultural Policy (CAP) provides income transfers to European farmers. Recently, several countries including England and Sweden have advocated the elimination of direct payments after 2013. The extent to which an elimination of direct payments would affect the land use dynamics in Europe including impacts on structural change and the environment has not been addressed in the existing literature. In this paper, we combine participatory methods, to analyze regional preferences for functions and effects of agriculture, and farm-level modeling, to assess the impacts of such a policy change on farm structures and land use intensities in four European regions located in Germany, Denmark, Italy and Poland, each with different socio-economic and biophysical characteristics. In each region, the entire farm population consisting of different farm types with different production orientations and land management types was modeled under the presence and absence of direct payments using a combination of agent-based and bio-economic modeling. We found that the initial characteristics of the regions, such as the historical farm structure and regional site conditions, greatly influence the impact of direct support elimination and cause regionally different development trends. The results for the four regions were summarized in four specific storylines that emphasize how much the diversity of European regions matters for future policy decisions. An explicitly regional focus is, therefore, argued to be crucial to complement future policy analysis.

Suggested Citation

  • Uthes, Sandra & Piorr, Annette & Zander, Peter & Bienkowski, Jerzy & Ungaro, Fabrizio & Dalgaard, Tommy & Stolze, Matthias & Moschitz, Heidrun & Schader, Christian & Happe, Kathrin & Sahrbacher, Amand, 2011. "Regional impacts of abolishing direct payments: An integrated analysis in four European regions," Agricultural Systems, Elsevier, vol. 104(2), pages 110-121, February.
    • Handle: RePEc:eee:agisys:v:104:y:2011:i:2:p:110-121
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    2. F. Střeleček & Daniel Kopta & Jana Lososová & Radek Zdeněk, 2012. "Economic results of agricultural enterprises in 2010," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 60(7), pages 315-328.
    3. Delmotte, Sylvestre & Barbier, Jean-Marc & Mouret, Jean-Claude & Le Page, Christophe & Wery, Jacques & Chauvelon, Phillipe & Sandoz, Alain & Lopez Ridaura, Santiago, 2016. "Participatory integrated assessment of scenarios for organic farming at different scales in Camargue, France," Agricultural Systems, Elsevier, vol. 143(C), pages 147-158.
    4. Eigner, Amanda E. & Nuppenau, Ernst-August, 2019. "Applied spatial approach of modelling field size changes based on a consideration of farm and landscape interrelations," Agricultural Systems, Elsevier, vol. 176(C).
    5. Appel, Franziska & Balmann, Alfons & Dong, Changxing & Rommel, Jens, 2018. "FarmAgriPoliS: An agricultural business management game for behavioral experiments, teaching, and gaming," IAMO Discussion Papers 271455, Institute of Agricultural Development in Transition Economies (IAMO).
    6. Utomo, Dhanan Sarwo & Onggo, Bhakti Stephan & Eldridge, Stephen, 2018. "Applications of agent-based modelling and simulation in the agri-food supply chains," European Journal of Operational Research, Elsevier, vol. 269(3), pages 794-805.
    7. Fastelli, Laura & Landi, Chiara & Rovai, Massimo & Andreoli, Maria, 2017. "A spatial analysis of terrain features and farming styles in a disadvantaged area of Tuscany (Mugello): implications for the evaluation and the design of CAP payments," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), vol. 6(1), May.
    8. Ciliberti, Stefano & Frascarelli, Angelo, 2015. "A critical assessment of the implementation of CAP 2014- 2020 direct payments in Italy," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), vol. 4(3), pages 1-17, December.
    9. Svoboda, J. & Lososová, Jana & Zdeněk, R., 2015. "Analysis of Operating Costs of Subsidies in the Field of Agriculture of EU Countries," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 7(4), pages 1-13, December.
    10. Happe, K. & Hutchings, N.J. & Dalgaard, T. & Kellerman, K., 2011. "Modelling the interactions between regional farming structure, nitrogen losses and environmental regulation," Agricultural Systems, Elsevier, vol. 104(3), pages 281-291, March.
    11. Loizou, Efstratios & Karelakis, Christos & Galanopoulos, Konstantinos & Mattas, Konstadinos, 2019. "The role of agriculture as a development tool for a regional economy," Agricultural Systems, Elsevier, vol. 173(C), pages 482-490.
    12. repec:zbw:iamodp:271455 is not listed on IDEAS
    13. Appel, F. & Balmann, A., 2018. "Predator or prey? - Effects of fast-growing farms on their neighborhood," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277358, International Association of Agricultural Economists.
    14. Marius Michels & Johannes Möllmann & Oliver Musshoff, 2020. "German Farmers’ Perspectives on Direct Payments in the Common Agricultural Policy," EuroChoices, The Agricultural Economics Society, vol. 19(1), pages 48-52, April.
    15. Bertolozzi-Caredio, Daniele & Bardají, Isabel & Garrido, Alberto & Berry, Robert & Bijttebier, Jo & Gavrilescu, Camelia & Harizanova, Hristina & Jendrzejewski, Błażej & Meuwissen, Miranda M.P. & Ollen, 2021. "Stakeholder perspectives to improve risk management in European farming systems," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 84, pages 147-161.

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