Abstract
Assessment based on representative farms is an established approach in the modern assessment of the effects of changes in agricultural policy. In line with previous CAP reforms, we can expect income redistribution impacts also with the implementation of the legislative and financial framework of the CAP for the next period. This paper discusses a scenario analysis using the farm model. The model is based on linear programming, which enables to address various technological challenges at farm level. We formed the scenarios for the analysis following the example of the scenarios contained in the impact assessment that the European Commission prepared for the CAP after 2020. The analysis involves selected farm types from selected sectors. The results suggest that the expected reduction in the envelope will generally lead to lower farm-level revenues from CAP direct payments. Consequently, economic performance will deteriorate, what is likely to be amplified in some sectors by the abolition of historical payments. The range of consequences at farm level will likely be considerable, especially for sectors and production types with a high share of CAP payments in the structure of total farm income. In certain sectors, however, there is even an improvement regarding the current situation.
Highlights
A new round of changes to the Common Agricultural Policy (CAP) began in 2017 and will culminate in the changing of the fundamental regulations of the CAP
Unlike the analytical tools developed in Slovenia so far, which primarily examined the effects of the CAP on the income position of Slovenian agriculture at the level of individual agricultural markets (Kavčič & Erjavec, 2003; Salomon et al, 2018) or the distributive effects of the changed direct payments policy on Slovenian agriculture (Rednak et al, 2005), this paper presents analyses based at the level of typical farms taken from (Rednak et al, 2009)
The aim of our research was to explore: – The possibilities of using model calculations as a basic data source for modelling with a farm model. – The applicability of developed farm model to assess the effects of future CAP reforms. – The income effects of the basic scenarios of future agricultural policy that emphasize the environmental, production or social aspects of agricultural policy. – The redistributive effects of scenario changes for individual farm types
Summary
A new round of changes to the Common Agricultural Policy (CAP) began in 2017 and will culminate in the changing of the fundamental regulations of the CAP. The most obvious changes are the shift toward a more result-oriented agricultural policy and a clear commitment to policy that is based on facts and an established intervention logic (Lovec et al, 2020), which is to be specified by the Member States’ Strategic Plans. These plans will for the first time encompass all of the CAP’s measures; each Member State will choose its agricultural policy priorities and, in accordance with common principles, determine the type, allocated funds and scope of individual measures. The substantive areas and the framework of CAP measures remain largely unchanged, except for a clear intention to strengthen environmental measures (Šumrada et al, 2020)
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