Reforming the Common Agricultural Policy: Decoupling Agricultural Payments from Production and Promoting the Environment
Esther Boere and
Gerrit van Kooten
No 201653, Working Papers from University of Victoria, Resource Economics and Policy
In this paper, we analyze the potential impact on producers’ land-use decisions in moving from support payments based on entitlements to a single farm payment (SFP). Further, we then consider a single farm payment with a greening component as part of the 2013 CAP reform. Using data for representative crop farms of different sizes in the Netherlands, we develop a farm-level crop allocation model that is calibrated using positive mathematical programming. We use a two-step calibration method to determine a nonlinear cost function and farm-specific risk aversion coefficients. Not unexpectedly, we find that the 2013 CAP reforms will cause farmers to shift away from crops previously eligible for payments, with the initial shift under the SFP enhanced by the move towards SFP combined with green payment.
Keywords: Agricultural and Food Policy; Environmental Economics and Policy; Farm Management (search for similar items in EconPapers)
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Working Paper: Reforming the Common Agricultural Policy: Decoupling Agricultural Payments from Production and Promoting the Environment (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:uvicwp:201653
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