LAND HETEROGENEITY AND THE EFFECTIVENESS OF CAP SET‐ASIDE

Hild Rygnestad and Robert Fraser

Journal of Agricultural Economics, 1996, vol. 47, issue 1‐4, 255-260

Abstract: The May 1992 reform of the CAP included a choice for farmers between set‐aside options. This paper examines the question of whether or not this choice feature has exacerbated the slippage problem associated with the set‐aside policy in the context of heterogeneous land quality. A model is developed which provides a basis for determining both a farmer's preferred choice of set‐aside option, and the implications of this choice for output reduction. A numerical application of the model suggests a strong tendency for farmers to choose the less effective option in terms of reducing output.

Date: 1996
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