The economic impact of allowing partial decoupling under the 2003 Common Agricultural Policy reforms. Kapitel i "Disaggregated Impacts of CAP Reforms: Proceedings of an OECD Workshop. 35-52"

Authors: Alan Renwick  Torbjörn Jansson  Steven Thomson 

The agreement to decouple European Union (EU) direct farm payments from production and to introduce the Single Payment Scheme (SPS) was formally made by the Council of Agricultural Ministers in June 2003. Due to concerns raised, the SPS provided member states the scope to retain some coupled support and this option was taken up by some member states but not others. This chapter, using conceptual and empirical analyses, assesses whether and to what extent partial decoupling is affecting the single market, and the effect it has on those countries and sectors that have embraced full decoupling. The results of a modelling exercise (using the CAPRI model) highlight that production in coupled countries is higher than would be the case if they had decoupled, and this has subsequent impacts on other EU member states through price and trade effects. This is particularly the case in the beef sector. Though the aggregate EU production and price impacts are generally small, the production impacts on certain member states and regions are more marked. Overall welfare levels in the European Union would have been higher if full decoupling had been implemented, and these gains would have been highest in the countries that remained coupled, particularly France and Spain.


Alan Renwick

Torbjörn Jansson

Steven Thomson