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Viability of the Raw Cotton Production in Spain After the Decoupling of the Subsidies

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  • Arriaza Balmón, Manuel
  • Gomez-Limon, Jose Antonio
  • Gonzalez, Jose
  • Ruiz, Pedro

Abstract

Considering the latest reform of the EU's Cotton Regulation of 29th April 2004, which will come into force in the 2006/07 season, we analyse its impact on the cotton production sector of Andalusia. The decoupling of subsidies implies that producers will be entitled to 65 percent of the amount received in the reference period (three years) irrespective of the crop chosen to grow. The remaining 35 percent (slightly higher) is paid as cotton are a payment. In this research, first from a survey carried out in 2004 we obtained six groups of producers using fact or analysis and cluster analysis. Then, based on this characterization, we assess the impact of two policy scenarios: (a) the implementation of the reform without any additional measures, and (b) the addition of a complementary environmentally based area payment plus the modulation of the decoupled subsidy up to 50 percent according to raw cotton quality. In the first scenario most producers would reduce the use of inputs to a minimum and leave the raw cotton in the fields. In the second scenario the production of cotton would shift from conventional toward Integrated Production with a reduction of 30% with respect to the current hectarage.

Suggested Citation

  • Arriaza Balmón, Manuel & Gomez-Limon, Jose Antonio & Gonzalez, Jose & Ruiz, Pedro, 2006. "Viability of the Raw Cotton Production in Spain After the Decoupling of the Subsidies," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25445, International Association of Agricultural Economists.
    • Handle: RePEc:ags:iaae06:25445
    DOI: 10.22004/ag.econ.25445
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    References listed on IDEAS

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    1. José A. Gómez‐Limón & Laura Riesgo & Manuel Arriaza, 2004. "Multi‐Criteria Analysis of Input Use in Agriculture," Journal of Agricultural Economics, Wiley Blackwell, vol. 55(3), pages 541-564, November.
    2. Arriaza, M. & Gomez-Limon, J. A., 2003. "Comparative performance of selected mathematical programming models," Agricultural Systems, Elsevier, vol. 77(2), pages 155-171, August.
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    4. Arriaza Balmón, Manuel & Gomez-Limon, Jose A. & Upton, Martin, 1997. "Local water markets for irrigation in southern Spain: A multicriteria approach," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 46(1), pages 1-23.
    5. Gomez-Limon, Jose A. & Riesgo, Laura, 2004. "Irrigation water pricing: differential impacts on irrigated farms," Agricultural Economics, Blackwell, vol. 31(1), pages 47-66, July.
    6. Huirne, R B M & Hardaker, J B, 1998. "A Multi-Attribute Utility Model to Optimise Sow Replacement Decisions," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 25(4), pages 488-505.
    7. Amador, Francisco & Sumpsi, Jose Maria & Romero, Carlos, 1998. "A Non-interactive Methodology to Assess Farmers' Utility Functions: An Application to Large Farms in Andalusia, Spain," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 25(1), pages 92-109.
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