Analysis of Future Agricultural Policies: What Impact has the Parametrization of Agricultural Support?

Abstract

Decoupled payments such as the basic payment scheme in the EU still accounts for an important share of the EU budget spent for the Common Agricultural Policy. Since the impact of decoupled payments on farm level output decisions via other coupling channels such as capitalization in land value, farmers' risk behavior, credit accessibility, uncertainty about future policies and labor allocation is controversially discussed, the objective of this article is to provide a thorough review of the relevant literature to compile the best available estimated parameters, incorporate them in a CGE modelling framework and simulate different scenarios to quantify the impact about different assumptions on models' results.