The Market for Payment Entitlements in Germany
Norbert Roeder and
No 36868, 82nd Annual Conference, March 31 - April 2, 2008, Royal Agricultural College, Cirencester, UK from Agricultural Economics Society
In 2005, Germany implemented CAP decoupled payments. Direct payments were converted into tradable, production decoupled, single farm payments (SFP) by a hybrid model. From 2010 - 2013, there will be a gradual transition to a regional model. The following paper shows the results of an analysis of the market for payment entitlements in Germany between 2005 and June 2007. Data are derived from the German Central IACS database (ZID). In this period 1.2 of the 17 million payment entitlements changed their owner. A closer look at the figures reveals that despite a large difference in the face value of the entitlements, the entitlements are rarely traded in order to optimize farm budget. In most cases, trade of entitlements is directly linked to farm or land transfer. As a consequence, the overwhelming majority of trade takes place on the local level with very little redistribution of direct payments on a regional level being observed. Differences between the thirteen German trading regions with respect to observed trade patterns are quite small.
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