, Volume 45, Issue 3, pp 188-192
Date: 12 Jun 2010

The impact of EU common agricultural policy decoupling on farm households: Income vs. investment effects

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This paper analyses the effects of decoupling (as introduced in the 2003 reform of the EU Common Agricultural Policy) on farm income and investment behaviour. The results of a dynamic multi-objective household model for 80 farm households in 8 EU countries are analysed and presented through a measure of investment-income elasticity as a reaction to decoupling. The results highlight the differing and contrasting reactions of farm households to policy changes. The main conclusion is that the diversity of farm specialisations and the dynamics of long-term adaptation should be taken into account more explicitly in the evaluation of policy impacts on EU farming systems.

The paper was funded by the IPTS, JRC-European Commission within the project “Investment behaviour in conventional and emerging farming systems under different policy scenarios”, CONTRACT 150369-2005. However, the views expressed in this paper are purely those of the authors and may not in any circumstances be regarded as stating an official position of the European Commission.