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GTAP Resource #3895

"Modelling the re-allocation of the European Union’s single farm payment entitlements and the re-introduction of set-aside"
by Jensen, Hans Grinsted and Wusheng Yu

The European Commission has finalised its legislative proposal as to how it sees the way forward for the Common Agricultural Policy (CAP) in the post 2013 period. The new proposal focuses on four main areas: direct payments, rural development, common market organisation and financing/management/monitoring of the CAP. In this paper we focus on the proposal for direct payments and especially the on-going debate about the redistribution of the single farm payment entitlements among the member states of the EU. The legislative proposal from the European Commission frames the total amount of direct payments which may be granted in each member state (national ceilings) in the period from 2013 to 2020. During this period the first steps will be taken towards levelling out the per hectare payments given to potentially eligible areas in each member country, but total harmonisation of per hectare payments will still not be fully implemented. In an earlier leaked proposal from the Commission it was envisaged that by 2028 all allocated payment entitlements in the union should have a uniform unit value, so that the average support rate would be roughly €268 per hectare of potentially eligible area in all member states. This was omitted from the final legislative proposal.

In this paper we go one step further than the present proposal from the Commission. We have chosen to model the consequences of re-allocating the single farm payment in 2028 so that all potentially eligible areas in the EU receive €268/ha in support from the CAP together with the requirement that 7 per cent of arable land excluding grass is set aside.
In order to quantify some of the economic effect of redistribution of the Single Payment Scheme (SPS) between EU member states and the introduction of 7 per cent set aside (excluding permanent pasture) a general equilibrium model and database is employed. More specifically the Global Trade Analysis Projects (GTAP) version 8 data base and model are adapt...

Resource Details (Export Citation) GTAP Keywords
Category: 2012 Conference Paper
Status: Published
By/In: Presented at the 15th Annual Conference on Global Economic Analysis, Geneva, Switzerland
Date: 2012
Created: Jensen, H. (4/30/2012)
Updated: Jensen, H. (4/30/2012)
Visits: 1,745
- Domestic policy analysis
- European Union

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