Disaggregated Impacts of CAP Reforms

Proceedings of an OECD Workshop

image of Disaggregated Impacts of CAP Reforms

The Common Agricultural Policy (CAP) is an important policy for the European Union and accounts for about 40% of the EU budget. Ever since its inception in 1958, the CAP has been regularly reviewed and adjusted to improve its performance and adapt to changing circumstances. At a time when the post-2013 future of the CAP is being discussed and major challenges such as food security and climate change lay ahead, it is important to review the impact of past reforms and to draw lessons for the design of future policies.

While the studies in these proceedings often take account of national and international market effects of agricultural policies, they tend to focus on the impact of policies on farms and at the regional and local levels. Today, the European Union is composed of very diverse regions that are affected very differently by any given farm policy, depending on the structural characteristics of the farms’ and regions’ economies.

This report collects papers presented at the OECD Workshop on Disaggregated Impacts of CAP Reforms, held in Paris in March 2010, which focused on recent reforms. In particular, it examined the implementation of the single payment scheme since 2005 and the transfer of funds between different measures. Special attention was also paid to reforms of the sugar and dairy sectors with respect to the quota system and the restructuring of both these industries. The papers also look at the impact of the new direct payment system on land use, production and income.


Spatial structure of agricultural production in France: the role of the Common Agricultural Policy

This chapter analyses the regional dynamic and spatial distribution of agricultural production in France. The analysis is based on data obtained at two spatial levels: region and département, and the data cover the period from 1990 to 2006. Different methods are applied to analyse the French production structure: maps and regional specialization are combined with regional concentration, the calculation of spatial autocorrelation and a local indicator of spatial association. These methods are applied to ten agricultural sectors. Results indicate that the activities which are regionally concentrated are not inevitably spatially autocorrelated, especially for production activities which are supported by the Common Agricultural Policy (CAP). A more specific analysis was conducted to determine the factors influencing the spatial dynamics using as an application the dairy sector (which is revealed as the most spatially autocorrelated). This approach was applied using spatial econometric models for dairy production in 1995 and 2005. It shows that market signals are more important in determining the dairy farm location in 2005 than they were in 1995. Environmental regulations also become more relevant in 2005 than in 1995, and seem to decelerate the rate of concentration amongst dairy farms


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