How the EU single farm payment should be modelled: lump-sum transfers, area payments or… something else ?

Frédéric Courleux, Herve Guyomard (), Fabrice Levert, Laurent Piet (), . Inra and . Société Française d'Economie Rurale
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Frédéric Courleux: Ministère de l'Agriculture et de la Pêche
Herve Guyomard: Économie et Sociologie Rurales - INRA - Institut National de la Recherche Agronomique
. Société Française d'Economie Rurale: SFER - Société Française d'Economie Rurale

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Abstract: The 2003 Common Agricultural Policy (CAP) reform radically changes the way the European Union (EU) supports its agricultural sector by decoupling direct payments. Production is no longer required to get the payment attached to Single Farm Payment (SFP) entitlements. However, the new scheme maintains a specific link between payments and hectares; in addition, SFP entitlements can be exchanged among farmers. These features question the way SFP entitlements should be regarded, hence modelled, i.e., as lump-sum transfers, area payments or… something else. We develop a microeconomic analytical framework which shows that the answer crucially depends on the total number of entitlements which are initially made available relative to the number of hectares, more specifically the number of cultivated hectares in a zero support regime, the number of cultivated hectares in a policy support regime trough per-hectare direct aids, and the number of cultivated or idled hectares in a policy regime where support is granted through direct aids per hectare and production is not required.

Keywords: UNION EUROPEENNE; DROIT AU PAIEMENT UNIQUE; MODELISATION; AIDES A LA SURFACE; TRANSFERT FORFAITAIRES; EUROPEAN UNION; COMMON AGRICULTURAL POLICY; SINGLE FARM PAYMENT; MODELLING; AREA PAYMENT; LUMP-SUM TRANSFER; POLITIQUE AGRICOLE COMMUNE; europe (search for similar items in EconPapers)
Date: 2007-12-13
Note: View the original document on HAL open archive server: https://hal.science/hal-02282245v1
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Citations: View citations in EconPapers (1)

Published in 1. Journées INRA-SFER de recherches en sciences sociales, Dec 2007, Paris, France

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