Impacts of CAP reforms on farm structures and performance disparities: An agent-based approach

The objective of this work is to investigate how Common Agricultural Policys (CAP) direct payments influence the development of farm structures and therefore performance and income disparities between farms. In this study the focus is put on the comparison of impacts of changes in direct payments distribution on the agricultural sector considering 1) the decoupling model, i.e. either a regional area payment, a historic payment or a hybrid payment system from 2005; 2) the level and design of modulation, i.e. cuts in Pillar I payments relative or not to farm size and; 3) yearly cuts in Pillar I payments for all farms from 2013 parallel to increases in Pillar II payments. Outcomes of policy changes are analysed regarding their impact on farm structures, land use, land markets and agricultural production. Distributive effects of direct payments and agricultural incomes among farms are compared. The analyses performed in this study provide a panorama of impacts of CAP reforms on the agricultural sector.