IDEAS home Printed from https://ideas.repec.org/a/eee/ecmode/v28y2011i4p1550-1558.html
   My bibliography  Save this article

Policy assessment of an EU wide flat area CAP payments system

Author

Listed:
  • Erjavec, Emil
  • Chantreuil, Frédéric
  • Hanrahan, Kevin
  • Donnellan, Trevor
  • Salputra, Guna
  • Kozar, Maja
  • van Leeuwen, Myrna

Abstract

While the evolution of the Common Agricultural Policy (CAP) until 2013 is clear, European Union (EU) budgetary pressures and the perceived unfairness of the distribution of CAP support across Member States has lead to uncertainty over the design of the CAP post 2013. One comprehensive reform option being considered is the implementation of an EU wide flat area payment (EUWFAP) system and a reduction of the total budget available for direct payments. It is hypothesised that the implementation of this policy proposal would lead to significant changes in the distribution of the EU budget and to the redistribution of agricultural production between the Member States, which could hinder the implementation of the proposal. This paper evaluates the rationality of the EUWFAP, based on the analysis of its budgetary and market impacts. Using the AGMEMOD 2020 combined model, the introduction of the EUWFAP in 2013 is compared with a baseline continuation of the current policy. Results suggest that there would be minor negative impacts on the agricultural production at the EU level, but that more substantial impact for some commodities, most notably beef, and could occur in the individual EU Member States. An important outcome of such a policy reform would be a substantial change in the budget allocation between Member States, which could help mitigate the budgetary tensions between the Member States.

Suggested Citation

  • Erjavec, Emil & Chantreuil, Frédéric & Hanrahan, Kevin & Donnellan, Trevor & Salputra, Guna & Kozar, Maja & van Leeuwen, Myrna, 2011. "Policy assessment of an EU wide flat area CAP payments system," Economic Modelling, Elsevier, vol. 28(4), pages 1550-1558, July.
    • Handle: RePEc:eee:ecmode:v:28:y:2011:i:4:p:1550-1558
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0264999311000253
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Salamon, Petra & Chantreuil, Frederic & Donnellan, Trevor & Erjavec, Emil & Esposti, Roberto & Hanrahan, Kevin F. & van Leeuwen, Myrna & Salputra, Guna, 2008. "Linking Large Numbers of Individual National Models: The Case of the AGMEMOD Partnership," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 43539, European Association of Agricultural Economists.
    2. Salamon, Petra & Chantreuil, Frederic & Donnellan, Trevor & Erjavec, Emil & Esposti, Roberto & Hanrahan, Kevin F. & van Leeuwen, Myrna & Bouma, Foppe & Dol, Wietse & Salputra, Guna, 2008. "How to deal with the challenges of linking a large number of individual national models: the case of the AGMEMOD Partnership," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 57(08), pages 1-6.
    3. Carsten Daugbjerg & Alan Swinbank, 2007. "The Politics of CAP Reform: Trade Negotiations, Institutional Settings and Blame Avoidance," Journal of Common Market Studies, Wiley Blackwell, vol. 45(1), pages 1-22, March.
    4. Keith H. Coble & J. Corey Miller & M. Darren Hudson, 2008. "Decoupled Farm Payments and Expectations for Base Updating," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 30(1), pages 27-42.
    5. repec:bla:jcmkts:v:47:y:2009:i::p:235-261 is not listed on IDEAS
    6. Arlindo Cunha & Alan Swinbank, 2009. "Exploring the Determinants of CAP Reform: A Delphi Survey of Key Decision‐Makers," Journal of Common Market Studies, Wiley Blackwell, vol. 47(2), pages 235-261, March.
    7. Yrjola, Tapani & Kola, Jukka, 2004. "Consumer Preferences Regarding Multifunctional Agriculture," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 7(2), pages 1-13.
    8. Allan Buckwell, 2007. "The Next Steps in CAP Reform Les prochaines étapes de la réforme de la PAC Die nächsten Schritte in der Reform der GAP," EuroChoices, The Agricultural Economics Society, vol. 6(2), pages 13-19, August.
    9. repec:bla:jcmkts:v:45:y:2007:i::p:1-22 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Production effects of moving to flatter structure of direct payments
      by Alan Matthews in CAP Reform.eu on 2011-09-30 15:28:51

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Cathal O'Donoghue & Thia Hennessy, 2014. "Chapter 03: The Agri-Food Sector," Chapters from Rural Economic Development in Ireland, in: Rural Economic Development in Ireland, edition 1, chapter 3, Rural Economy and Development Programme,Teagasc.
    2. Rezbova, Helena & Tomsík, Karel, 2012. "Impact of Complementary National Direct Payments on Cattle Breeding Sector," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 4(4 Special), pages 1-11, December.
    3. 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.
    4. Mugurel Ionel JITEA & Diana Elena DUMITRAȘ & Vasile Alexandru SIMU, 2015. "An ex-ante impact assessment of the Common Agricultural Policy reform in the North-Western Romania," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 61(2), pages 88-103.
    5. Galluzzo, Nicola, 2018. "A quantitative analysis of the CAP towards rural Romanian areas," 162nd Seminar, April 26-27, 2018, Budapest, Hungary 271963, European Association of Agricultural Economists.
    6. Cilierti, Stefano & Frascarelli, Angelo, 2014. "Direct payments 2014-2020: a qualitative method for evaluating resource allocation scenarios in Italy," Politica Agricola Internazionale - International Agricultural Policy, Edizioni L'Informatore Agrario, vol. 2013(4), September.
    7. Jana Lososová & Jaroslav Svoboda, 2013. "Changes in direct payments after 2013 in the Czech agrarian sector," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 61(2), pages 393-404.
    8. Jana Vavřina & Kamila Růžičková & Dana Martinovičová, 2012. "The CAP reform beyond 2013: the economic performance of agricultural enterprises within the Visegrad Group," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 60(7), pages 451-462.
    9. Banse, Martin & Janzen, Niels & Junker, Franziska & Kreins, Peter & Offermann, Frank & Salamon, Petra & Weimar, Holger, 2016. "Modelling the Bioeconomy: Linkages between Agricultural, Wood and Energy Markets," Conference papers 332764, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    10. Stanković, Milica, 2014. "Agricultural Franchising And Contribution To Achieving Objectives Of The Eu Common Agricultural Policy," Economics of Agriculture, Institute of Agricultural Economics, vol. 61(4), pages 1-15, December.
    11. Adrian Sadłowski, 2021. "Average Levels of Direct Support for Farmers in Poland at the Regional Level," European Research Studies Journal, European Research Studies Journal, vol. 0(Special 1), pages 421-430.
    12. Chatellier, Vincent & Guyomard, Herve, 2012. "The October 2011 Legislative Proposals for CAP Reform: A French Point of View," 126th Seminar, June 27-29, 2012, Capri, Italy 126988, European Association of Agricultural Economists.
    13. Miguel Viegas & Jan Wolf & Francisco Cordovil, 2023. "Assessment of inequality in the Common Agricultural Policy in Portugal," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 11(1), pages 1-15, December.
    14. Dimitrios Kremmydas & Konstantinos Tsiboukas, 2022. "Redistribution and the Abolishment of Historical Entitlements in the CAP Strategic Plans: The Case of Greece," Sustainability, MDPI, vol. 14(2), pages 1-14, January.
    15. Roel Jongeneel & Siemen Berkum & Hans Vrolijk, 2016. "Summary," EuroChoices, The Agricultural Economics Society, vol. 15(2), pages 26-33, August.
    16. Petra Salamon & Martin Banse & Jesus Barreiro Hurle & Ondrej Chaloupka & Trevor Donnellan & Emil Erjavec & Thomas Fellmann & Kevin Hanrahan & Marlen Hass & Roel Jongeneel & Verena Laquai & Myrna van L, 2017. "Unveiling diversity in agricultural markets projections: from EU to Member States. A medium-term outlook with the AGMEMOD model," JRC Research Reports JRC109115, Joint Research Centre.
    17. Blanco, Maria & Garcia-German, Sol & Bardaji, Isabel, 2011. "El modelo de ayudas directas en la PAC post-2013: análisis de impactos de escenarios potenciales," Economia Agraria y Recursos Naturales, Spanish Association of Agricultural Economists, vol. 11(02), pages 1-26, December.
    18. Stefano Ciliberti & Angelo Frascarelli, 2018. "The CAP 2013 reform of direct payments: redistributive effects and impacts on farm income concentration in Italy," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 6(1), pages 1-18, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Thomas Fellmann & Myrna Leeuwen & Petra Salamon & Ali Koc & Gulden Boluk, 2012. "EU Enlargement to Turkey: Potential Effects on Turkey’s Agricultural Income and Markets," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 2(2), pages 1-16, December.
    2. Erjavec, Karmen & Erjavec, Emil, 2009. "Changing EU agricultural policy discourses? The discourse analysis of Commissioner's speeches 2000-2007," Food Policy, Elsevier, vol. 34(2), pages 218-226, April.
    3. Espinosa, Maria & Gocht, Alexander & Heckelei, Thomas & Paloma, Sergio Gomez y, 2016. "Incorporating farm structural change in models assessing the Common Agricultural Policy: An application in the CAPRI farm type model," Journal of Policy Modeling, Elsevier, vol. 38(6), pages 1040-1059.
    4. Britz, Wolfgang, 2014. "A New Graphical User Interface Generator for Economic Models and its Comparison to Existing Approaches," Journal of International Agricultural Trade and Development, Journal of International Agricultural Trade and Development, vol. 63(4).
    5. Fellmann, T. & von Leeuwen, M. & Salamon, P., 2012. "EU enlargement to Turkey: Potential impacts on agricultural markets and how they are shaped by changes in macroeconomis conditions," Proceedings “Schriften der Gesellschaft für Wirtschafts- und Sozialwissenschaften des Landbaues e.V.”, German Association of Agricultural Economists (GEWISOLA), vol. 47, March.
    6. Angulo, Laura & Salamon, Petra & Banse, Martin & Döring, Ralf & Keller, Matthias & Van Leeuwen, Myrna, 2018. "Future Developments in German Fish Market – Integration of Market Expert Knowledge into a Modelling System," International Journal on Food System Dynamics, International Center for Management, Communication, and Research, vol. 9(1), January.
    7. Guna Salputra & Myrna van Leeuwen & Petra Salamon & Thomas Fellmann & Martin Banse & Oliver Ledebur, 2013. "The agri-food sector in Russia: Current situation and market outlook until 2025," JRC Research Reports JRC76915, Joint Research Centre.
    8. Emil Erjavec & Ilona Rac, 2023. "Improving the Quality of CAP Strategic Planning through Enhancing the Role of Agricultural Economics," EuroChoices, The Agricultural Economics Society, vol. 22(2), pages 71-76, August.
    9. Thomas Fellmann & Myrna Van Leeuwen & Petra Salamon & Ali Koç & Gülden Bölük & Andrzej Tabeau & Roberto Esposti & Andrea Bonfiglio & Antonello Lobianco & Kevin Hanrahan, 2011. "Potential impacts on agricultural commodity markets of an EU enlargement to Turkey Extension of the AGMEMOD model towards Turkey and accession scenario," JRC Research Reports JRC60663, Joint Research Centre.
    10. Patricia Garcia-Duran & Montserrat Millet, 2014. "The determinants of CAP reform: learning from the European financial crisis and CAP 2013," UB School of Economics Working Papers 2014/315, University of Barcelona School of Economics.
    11. Banse, Martin & Salamon, Petra & Ledebur, Oliver von & van Leeuwen, Myrna & Bouma, Foppe & Salputra, Guna & Fellmann, Thomas & Nekhay, Olexandr, 2012. "Impact of Russia and Ukraine on the international price formation and the EU markets - A Model based analysis," 123rd Seminar, February 23-24, 2012, Dublin, Ireland 122536, European Association of Agricultural Economists.
    12. Myrna van Leeuwen & Petra Salamon & Thomas Fellmann & Martin Banse & Oliver von Ledebur & Guna Salputra & Olexandr Nekhay & Robert M'barek, 2012. "The agri-food sector in Ukraine: Current situation and market outlook until 2025," JRC Research Reports JRC71776, Joint Research Centre.
    13. Erjavec, E. & Salputra, Guna, 2011. "Could The Radical Changes Of Direct Payments Policy Destroy Agricultural Markets In The Eu New Member States?," Economics of Agriculture, Institute of Agricultural Economics, vol. 58(1).
    14. Britz, Wolfgang, 2014. "A New Graphical User Interface Generator for Economic Models and its Comparison to Existing Approaches," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 63(04), pages 1-15, December.
    15. Anania, Giovanni, 2007. "Multilateral Negotiations, Preferential Trade Agreements and the CAP. What's Ahead?," Working Papers 7283, TRADEAG - Agricultural Trade Agreements.
    16. Devadoss, Stephen & Gibson, Mark J. & Luckstead, Jeff, 2016. "The Impact of Agricultural Subsidies on the Corn Market with Farm Heterogeneity and Endogenous Entry and Exit," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 41(3), pages 1-20, September.
    17. Niemi, Jarkko K. & Sinisalo, Alina & Valros, Anna & Heinonen, Mari, 2012. "Market and policy-oriented incentives to provide animal welfare: The case of tail biting," 126th Seminar, June 27-29, 2012, Capri, Italy 125957, European Association of Agricultural Economists.
    18. Chen Qiuzhen & Sumelius John & Arovuori Kyösti, 2009. "The evolution of policies for multifunctional agriculture and rural areas in China and Finland," European Countryside, Sciendo, vol. 1(4), pages 202-209, January.
    19. Kotevska, Ana & Dimitrievski, Dragi & Erjavec, Emil, 2013. "Partial Equilibrium Model As A Tool For Policy Analysis In Agriculture: An Empirical Evidence Of Macedonia," 50th Anniversary Seminar, Agriculture and Rural Development -Challenges of Transition and Integration Processes, September 27, 2013 161772, University of Belgrade, Department of Agricultural Economics, Faculty of Agriculture.
    20. Marković, Ivan & Marković, Milan, 2014. "Agricultural Protectionism Of The European Union In The Conditions Of International Trade Liberalization," Economics of Agriculture, Institute of Agricultural Economics, vol. 61(2), pages 1-18, June.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecmode:v:28:y:2011:i:4:p:1550-1558. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/30411 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.