Tag: CAP Reform

Following a transition year, the new Common Agricultural Policy period, starting in 2015, is expected to bring a number of major changes in the payment scheme of Pillar 1. Using the example of the Austrian small ruminant sector (sheep and goats), this paper describes the effects of an area-based payment scheme instead of the Single Farm Payment Scheme applied previously. The calculations are based on the specifi cation and simulation of seven different farm models and on an analysis of the Austrian Integrated Administration and Control System data sets. The results of both analyses suggest redistribution effects in favour of less extensive farm management systems. However, farms with high single farm payments per hectare are expected to face big cuts in direct payments by 2015. To avoid hardship the amount of the payments will be gradually amended over the coming years until 2019.

In Hungary, the rates of direct payments to farmers under the Common Agricultural Policy for the period 2014-2020, the distribution of these payments, and ultimately their impacts on farming decisions, will depend on the combination of mandatory and optional Pillar I support schemes to be introduced in 2015. This paper presents estimations of the structural impact of six new support policy option mixes (scenarios) compared to 2013 (baseline), and discusses the policy implications in terms of the degressivity of direct payments versus the possible introduction of the Redistributive Payment in particular. The calculations of direct payment rates and the distribution of these payments were based on the database of the Hungarian Agricultural and Rural Development Agency for 2011, and the moving averages of the descriptive parameters of farms were obtained from the Farm Accountancy Data Network. To assess the structural impacts an agent-based simulation model was developed. Decisions were modelled at the micro-level and macro-outcomes were modelled as the consequences of these micro-level decisions. From an economic point of view, the Redistributive Payment would have no real advantage over the reduction of direct payments in Hungary as the Redistributive Payment would benefit only farms of relatively small size and would ...