CAP reform and redistribution of direct payments in Slovenia
2006
Emil ERJAVEC | Miroslav REDNAK | Tina VOLK | Maja KOŽAR
The paper attempts to estimate the redistribution of direct payments under different alternatives of the 2003 reform of the EU Common Agricultural Policy (CAP) among the agricultural holdings in Slovenia. The scenario analysis is based on a static deterministic model of agricultural holdings and includes 58,776 agricultural holdings which applied for direct payments in 2002. The distribution of direct payments under different alternatives of CAP reform was compared against the distribution of standard scheme with 100 % EU level of payments. Introduction of a net regional scheme with a defined single area payment would result in a drop in budgetary transfers to 13,684 holdings (23.3 %) in comparison with the standard scheme. These holdings receive a bulk of direct payments (46 %) under the standard scheme. Estimated impacts by sectors reveal that the negative distributive effects occur mainly in the beef and milk sectors. If the policy makers seek to minimize the redistribution effects, the specific compensatory payments as well as gradual introduction of single payments could be introduced. However, the question is if in this case the aims of policy changes are fulfilled and new public concerns about agriculture are met satisfactorily.
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