Decoupling and agricultural investment with disinvestment flexibility: a case study

Tiina Heikkinen

International Journal of Agricultural Resources, Governance and Ecology, 2009, vol. 8, issue 2/3/4, 300-317

Abstract: This paper studies the impact of changing national supports on agricultural investments, when taking into account disinvestment flexibility, focusing on a case study in Finnish agriculture. Numerical examples suggest that the reduction and decoupling of national support will cause a significant reduction in investments in the case study. However, assuming disinvestment flexibility, decoupling, if accompanied by fixed compensating payments, increases income stability and a higher level of investments can be achieved even with lower subsides. Increased income stability may also diminish the dynamic cost of income uncertainty. When decoupling the income support from production, it is important to ensure the stability of the compensating direct payments.

Keywords: rural investment; uncertainty; CAP reform; decoupling; dynamic programming; disinvestment flexibility; governance; agricultural investment; Finland; Common Agricultural Policy. (search for similar items in EconPapers)
Date: 2009
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.inderscience.com/link.php?id=26231 (text/html)
Access to full text is restricted to subscribers.

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:ids:ijarge:v:8:y:2009:i:2/3/4:p:300-317

Access Statistics for this article

More articles in International Journal of Agricultural Resources, Governance and Ecology from Inderscience Enterprises Ltd
Bibliographic data for series maintained by Sarah Parker ().