Grundsätzliche Überlegungen zu einer Entkopplung der Direktzahlungen in der EU

Gunnar Breustedt

German Journal of Agricultural Economics, 2003, vol. 52, issue 03, 8

Abstract: This paper analyses theoretically the consequences of decoupling and argues for a wider discussion among agricultural economists and the public. Quantitative work on forecasting the consequences seems to be problematic in general. We ask, if the allocation of land will change that dramatically, in particular, we wonder whether setaside will increase that much as some research and statements argue if direct payments are abolished or decoupled from land use. Taking into account economies of scale that can be realised because of faster change in the farming structure, adapted behaviour of farmers due to dramatic changes in the subsidisation scheme, technological progress, and price changes of factors and products in farmers’ benefit we conclude that most quantitative forecasts probably overestimate the changes in land allocation. Social objectives that may be incorporated with agricultural land use are analysed as well as the efficiency of direct payments to achieve these objectives. Distributional effects of income are taken into consideration, too. We recommend that politicians should decide as soon as possible to abolish direct payments stepwise over some years. Farmers should be aware of an end for the direct payments and should keep high flexibility to adapt to the future as easy as possible. Therefore, they should avoid investments with a high portion of sunk costs and they should analyse their capital use, especially on marginal land. Further on, they should try to reduce costs by increasing the size of farms and acres.

Keywords: Agricultural; and; Food; Policy (search for similar items in EconPapers)
Date: 2003
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://ageconsearch.umn.edu/record/98355/files/3_Breustedt.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:gjagec:98355

DOI: 10.22004/ag.econ.98355

Access Statistics for this article

More articles in German Journal of Agricultural Economics from Humboldt-Universitaet zu Berlin, Department for Agricultural Economics Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().