The Single Payment Scheme of the CAP: Entitlements Availability and Farmers Behavior

The way entitlements are originally allocated among farmers and some conditions required to get the payments could affect farmer's willingness to trade land and entitlements. This paper - using a qualitative approach and some results of a farm based simulation analysis - explores how entitlements availability and other farm specific parameters affect land and entitlement shadow prices and farmers attitude to trade land and entitlement. The conditions under which this occurs, the role of taxing the exchange of entitlements and of both modulation and conditionality on exchange of entitlements are also studied.