1. Farm viability in the EU Impact of reduction of farm payments
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Farm viability in the EU Impact of reduction of farm payments
OECD NETWORK FOR FARM LEVEL ANALYSIS
9 – 10 september 2010, Paris
Dr. Hans C.J. Vrolijk; LEI Agricultural Economics Research Institute

2. Overview Problem description Methodology Results
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Problem description
Methodology
Results
Conclusion and discussion
publications and products

3. Problem description
Farm viability depends on level and volatility of incomes
Level of income depends to different extents on farm subsidies
Farm payments under discussion
Research objective
Importance of subsidies in the agricultural sector
Impact of reduction of payments on viability of farms

4. Methodology FADN dataset Three scenarios evaluated:
Most detailed micro-economic dataset
Includes the variety among farms in a country
Focus on income from farming
Three scenarios evaluated:
All farms subsidies
Decoupled payments
Decoupled payments plus production related subsidies

5. Farm viability categories

6. Importance of subsidies (countries)

8. Importance of subsidies (types of farming)

9. Results (national results, decoupled payments)

10. Results (national results)

11. Results (national results bottom and top 5)

12. Results (arable, decoupled payments)

13. Results (arable, decoupled payments)

14. Results (arable, decoupled and product payments)

15. Other types

16. Other impacts of abolishment of farm payments
Simulation describe first order impacts
Other indirect effects
Adaptations of farmers
Land prices
Structural change
Risk exposure
Prices of products

17. Sensitivity 20% price increase of output and intermediate consumption
15% of farms improve viability class
3.5% shift from negative to positive income
Large number of farms shifting to positive income in Denmark (12%), France (8%), Germany (8%), Luxembourg (7%) and the UK (7%)

18. Discussion Limitations of approach First order impacts
Assumption of fixed cost structure
Only income from farming included in the analysis

19. Conclusions
Denmark, Ireland, Sweden and UK heavily affected, for some types France, Germany, Hungary and Slovakia
CAP types of farms less vital, adaptations can be expected, intensive sectors (horticulture, permanent crops and granivores) less affected
Land related farming activities most affected, impact on rural areas
FADN of great importance to estimate effects at farm level, integration with other agricultural models

20. 14/01/2019
Discussion
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