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.


The CAP Health Check in France: A significant redistribution of payments?

This chapter presents an analysis of the consequences of the implementation, in France, of the Health Check of the Common Agricultural Policy (CAP). The simulations, conducted with the Farm Accountancy Data Network (FADN), demonstrate a shift of direct payments in favour of extensive grazing farms, mainly those with a high proportion of pasture in their rotation. By contrast, crop farms and farms with intensive production of cattle are losers. The redistribution of direct payments permitted through modulation and Articles 63 and 68 of the European Council (EC) Regulation is favourable to disadvantaged areas, particularly mountainous areas. This change in the CAP is moving towards increased standardization of the amount of decoupled payments per hectare. In addition, it promotes a more focused allocation of resources for the protection of natural resources and compensation for environmental and territorial services.


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