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An ex-ante analysis of distributional effects of the CAP on western German farm incomes

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  • Deppermann, Andre
  • Grethe, Harald
  • Offermann, Frank

Abstract

This study is concerned with measuring impacts of the Common Agricultural Policy (CAP) on farm income distribution of western Germany. Not only the sheer contribution of market price support and direct payments as a proportion of income is taken into account, but also the impact of support on production incentives. For this purpose, we apply a modelling system consisting of a partial equilibrium model and a programming model. Based on a comparison of Gini coefficients and a decomposition of overall inequality effects we conclude that liberalization of the agricultural sector leads to a more unequal distribution of family farm income in relative terms, whereas a liberalized market provides a more equal situation in absolute terms.

Suggested Citation

  • Deppermann, Andre & Grethe, Harald & Offermann, Frank, 2011. "An ex-ante analysis of distributional effects of the CAP on western German farm incomes," 122nd Seminar, February 17-18, 2011, Ancona, Italy 99428, European Association of Agricultural Economists.
    • Handle: RePEc:ags:eaa122:99428
    DOI: 10.22004/ag.econ.99428
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    References listed on IDEAS

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    1. Deppermann, Andre & Grethe, Harald & Offermann, Frank, 2010. "Farm level effects of EU policy liberalization: Simulations based on an EU-wide agricultural sector model and a supply model of the German agricultural sector," 114th Seminar, April 15-16, 2010, Berlin, Germany 61083, European Association of Agricultural Economists.
    2. von Witzke, Harald & Noleppa, Steffen, 2007. "Agricultural and Trade Policy Reform and Inequality: The Distributive Effects of Direct Payments to German Farmers under the EU's New Common Agricultural Policy," Working Paper Series 10289, Humboldt University Berlin, Department of Agricultural Economics.
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    Agricultural and Food Policy;

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