An assessment of the post 2015 CAP reforms: winners and losers in Scottish farming

The post 2015 Common Agricultural Policy (CAP) reforms may bring a substantial change in the way farm payments are paid in Scotland where earlier farm payments were based on historical entitlements. Scottish farms now have to follow a Basic payment Scheme (BPS) which would be determined under a mandatory internal convergence. For the internal convergence there have been a number of proposals put forward by the Scottish government based on land capabilities. This paper examines one of regional payment scenario with and without partially coupled payments and identifies the winners and losers among Scottish farms under that scenario compared to the historical payments they currently are receiving. Farm level data from the 2010 Scottish Farm Accountancy Survey (FAS) was used in a farm level optimising model (ScotFarm) for this study. The results show that a majority of farm types would lose out under proposed CAP reform scenario. Sheep farms however, would benefit the most (6% to 7% on farm net margins) under the fully decoupled payment scenario. The partial coupled calf payments slightly increase beef farm margins but they still fail to improve on whole farm margins on beef farms. Overall, the studied scenarios support extensive farms in expense of all other farm types.