The Single Payment Scheme (SPS) after 2013: New Approach - New Targets (SinglePayment)
Funding
European Parliament, Contract no. IP/B/AGRI/IC/2011 068
Duration
December 2009 - April 2010
Organisation
Project leader: EuroCARE GmbH
Project coordinators:
Key contribution:
- Jean Christophe Bureau
- Heinz Peter Witzke
- Jean-Pierre Butault
- Alexandre Gohin
- Thomas Heckelei
- Bettina Rudloff
- Nathalie Delame
- Werner Kleinhanss
- Luca Salvatici
- Alan H. Matthews
- Giovanni Anania
Overview
Since 1992 farm subsidies have been decoupled from production and been transformed into a direct income support for farmers. This has helped solving some of the major imbalances between supply and demand, has reduced international tensions as well as distortions of competitions for developing countries farmers. This has also reduced the incentive for environmentally harmful production. While most of the negative consequences of the "old CAP" have been reduced, there is a rather broad consensus for strengthening its positive effects. Only if the CAP efficiently promotes societal interests in agriculture will it be legitimate in the eyes of the citizens and viable in the long run. At the same time, there is much uncertainty regarding the future of world food security, and the longer term reform of the CAP should take into account that in this area, the world may enter some uncharted waters, with perhaps more volatility in both production and prices.
The team makes its own proposal (or possibly alternate scenarios) for a new model of decoupled payments to replace the SPS. Detailed information on the consequences of this possible scheme are provided. Several instruments are used:
- Distributional issues are assessed using microeconomic data, so that the impact in terms of change in payments received and change in income will be presented by region, orientation, size, and when useful altimetric zone. Approved by the EU Commission, the Farm Accountancy Data Network (FADN) is used.
- The impact of the new farm payment model on price, production, exports and imports are investigated carefully with one or several of the econometric models that the team has developed (e.g. CAPRI or GOAL). Sensitivity analyses and confidence intervals are used on some questions for which economic theory is not entirely conclusive, such as the way different forms of payment affect yields and more generally supply response.
- The use of a spreadsheet base simulator makes it possible to assess the impact of the new model in terms of net budget returns between member states, gains and losses under a dynamic framework (reform of the financing of the EU budget, future of the various rebates).
- The use of a spreadsheet base simulator (already developed by some members of the team) makes it possible to assess the impact of the new model in terms of WTO commitments, based on the most recent draft modalities.
Contributions of EuroCARE
Witzke is in charge of the administrative, financial and legal aspects of the contract. He is the interlocutor of the European Parliament.
Witzke is the project manager and the contact point for the European Parliament. He is authorized to sign all documents, including financial on behalf of Eurocare.
Documents
Bureau J.-C., Witzke, H.-P. (2010): THE SINGLE PAYMENT SCHEME AFTER 2013: NEW APPROACH-NEW TARGETS, European Parliament
