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Assessing the impacts of the 2003 CAP Mid Term Review: How sensitive are they to the assumed production responsiveness to Agenda 2000 direct payments?

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  • Gohin, Alexandre

Abstract

The EU adopts once again in June 2003 a new reform of its farm policy with a new step toward the decoupling of farm income support instruments. Available impact studies find that this reform will reduce production incentives, substantially for beef and to a lesser extent for arable crops. All these studies assume that the Agenda 2000 arable crop direct payments are already mostly decoupled while beef premiums are much more linked to production. Our main objective in this paper is to test the robustness of these results to this questionable modelling on Agenda 2000 direct payments. Our analysis reveals that the negative impacts of the CAP MTR on both the arable crop and beef productions is robust to the modeling of Agenda 2000 direct payments. On the other hand, our analysis shows that the decoupling effects may be higher on the arable crop markets than on the beef markets. Policy implications of these results are finally derived.

Suggested Citation

  • Gohin, Alexandre, 2005. "Assessing the impacts of the 2003 CAP Mid Term Review: How sensitive are they to the assumed production responsiveness to Agenda 2000 direct payments?," Conference papers 331426, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    • Handle: RePEc:ags:pugtwp:331426
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    2. Francois, Joseph F., 1998. "Scale Economies And Imperfect Competition In The Gtap Model," Technical Papers 28718, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
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