The Effect of Decoupling on Farming in Ireland: A Regional Analysis

Thia Hennessy (), Shailesh Shrestha () and Stephen Hynes
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Thia Hennessy: Rural Economy and Development Programme, Teagasc, Athenry, Co. Galway, Ireland

No 611, Working Papers from Rural Economy and Development Programme,Teagasc

Abstract: This paper uses Irish National Farm Survey and Census of Agriculture data to analyse the regional implications of the decoupling of direct payments for farmers in Ireland. A mathematical programming model is used to estimate the regional effects of decoupling while a microsimulation model is exploited to map the geographic distribution of decoupled payments. The results show that under the historical decoupling scheme, milk quota will shift from less efficient to larger more efficient farms in all regions. Beef cattle numbers are projected to decrease on all farms with the exception of the mid-east and south-east regions where farmers are projected to increase animal numbers. The regional effect of decoupling on sheep farming is marginal with all regions projected to benefit from the policy change. The analysis also shows, using a static microsimulation model, that a shift to a flat rate national calculation of the decoupled payment would result in a significant movement of revenues from the southeast of the country to the northwest. In particular, large beef and dairy farmers in the south would lose out while small dairy and sheep farmers in the west and northwest would be most likely to gain.

Pages: 18 pages
Date: 2006
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Citations: View citations in EconPapers (11)

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