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Effects of a flat rate introduction: shifts in farm activity and impact on farmers' income

Author

Listed:
  • Marchand, Fleur L.
  • Buysse, Jeroen
  • Campens, V.
  • Claeys, Dakerlia
  • Fernagut, Bruno
  • Lauwers, Ludwig H.
  • Van der Straeten, Bart
  • Van Huylenbroeck, Guido

Abstract

Current thoughts on CAP changes, e.g. the "Health Check", emphasize the necessity to move away from payments based on historical receipts towards a "flatter rate" system. The aim of current research is to simulate the impact of a flat rate system (equal payments per hectare of cultivated land) compared to the current historical system (payments based on individual historic entitlements). Impact on production and income of arable, dairy and cattle farms of two different flat rate scenario's, is assessed with a farm-based sector model for Flanders. The model maximizes income at farm level, calibrated to observed farming behavior in 2001-2003. Farm data can be selected by farm type, size and region, simulations could be run for specific sub sectors, size classes or regions. In the two simulated flat rate scenario's subsectors will gain subsidies at the expense of other subsectors. However, farms can compensate a substantial part of their income loss by changing activity choice.

Suggested Citation

  • Marchand, Fleur L. & Buysse, Jeroen & Campens, V. & Claeys, Dakerlia & Fernagut, Bruno & Lauwers, Ludwig H. & Van der Straeten, Bart & Van Huylenbroeck, Guido, 2008. "Effects of a flat rate introduction: shifts in farm activity and impact on farmers' income," 107th Seminar, January 30-February 1, 2008, Sevilla, Spain 6681, European Association of Agricultural Economists.
    • Handle: RePEc:ags:eaa107:6681
    DOI: 10.22004/ag.econ.6681
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    Cited by:

    1. 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.
    2. Helming, John F.M. & Peerlings, Jack H.M., 2012. "Economic and environmental effects of an EU flat rate for the Dutch agricultural sector," 123rd Seminar, February 23-24, 2012, Dublin, Ireland 122481, European Association of Agricultural Economists.
    3. Scardigno, Alessandra & Bazzani, Guido Maria, 2008. "An Integrated Territorial Simulation Model To Evaluate Cap Reform On Mediterranean Agriculture. Methodological Proposal And First Applications In Apulia Region (Southern Italy)," 109th Seminar, November 20-21, 2008, Viterbo, Italy 44799, European Association of Agricultural Economists.

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