1. F. Arfini, M. Donati, R. Gigante
CARERA Meeting
Uppsala, 8 June 2007
Deliverable - D9
Effects of Fischler’s Reform on
Farming Activities and Employment
Levels
F. Arfini, M. Donati, R. Gigante
(University of Parma)

2. Contents
Quantitative CAP assessment by using PMP model with respect to the FADN sample concerning the regions:
Emilia-Romagna (Italy)
East Wales (UK)
Kassel (Germany)
Anatoliki Makedonia and Thraki (Greece)
Ostra Mellansverige (Sweden)
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3. Model application
The policy and market scenarios identified in this study are presented below:
Baseline scenario: it is the scenario used for the calibration of the models for each FADN Region. In term of policy financial aid are related to the situation before the introduction of the Mid Term Review. In term of market scenario price are related to the year 2003.
Scenario 1 (S1): full decoupling for all products benefiting from direct support, including milk, according to Annex VI of Reg. 1782/2003, and sugar.
Scenario 2 (S2): Scenario 1 plus relative price variation referred to year 2013 (on the basis of FAPRI projection)
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4. Model application
The aim is to evaluate the net effect of the decoupling policy without market influence and the response of the farm decision with respect to estimated variations in agricutlural products market.
The price projections considered in Scenario 2 are obtained by FAPRI source.
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5. Baseline Land Allocation Base situation CARERA Meeting
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6. Anatoliki-Makedonia-Thraki
Base situation
Emilia-Romagna
Anatoliki-Makedonia-Thraki
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7. Base situation
Kassel
East-Wales
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8. Base situation
Ostra Mellansverige
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9. Policy Scenarios Assessment
Simulation
Policy Scenarios Assessment
Land Allocation
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10. Model results – Land allocation
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11. Model results – Land allocation
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12. Policy Scenarios Assessment
Simulation
Policy Scenarios Assessment
Animal Production
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13. Model results – Animal Production
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14. Policy Scenarios Assessment
Simulation
Policy Scenarios Assessment
Economic Variables
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15. Model results – Economic variables
Gross Margin S1 S2
GSP
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16. Model results – Economic variables
Subsidies S1 S2
Variable Costs
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17. Policy Scenarios Assessment
Simulation
Policy Scenarios Assessment
Labour
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18. Model results – Labour Family Labour Extra-family Labour
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19. Conclusions
Decoupling constitutes an incentive to move the production plan toward those crops that permit to minimize the productions costs and to reach highest revenue without interferences of coupled subsidies.
Animal productions are more influenced by the dynamics on market prices than by the new subsidy regime.
The economic results seem improve for the most part of the regions, as a consequence of the restoring of real farm processes profitability and, for some regions, thanks to the new decoupled premium on the milk production.
Decoupling leads to a decrease in the level of effort required by the farm activities. The change in the and the decrease in livestock induce a reduction of the contribution of the family and extra-family workers in farm activity.
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