1. CAPRI Premium payments in CAPRI Torbjörn Jansson* *Corresponding author +49-228-732323 www.agp.uni-bonn.de Department for Economic and Agricultural Policy Bonn University Nussallee 21 53115 Bonn, Germany CAPRI Training Session in Warzaw June 26-30, 2006 CAPRI Common Agricultural Policy Regional Impact

2. CAPRI CAPRI Training Session in Warzaw, June 26-30, 2006 2 Premiums with ceilings (quotas) Two principal possibilities I.Individual premium rights: The marginal premium is discontinuous with a sharp drop II.Each individual perceives the premium rate as constant All premiums in CAPRI work as (II) Minimum data required for each premium: –Activity list for which premium is defined –Premium amount if ceiling not reached –Ceiling in Euro or Hectares/Heads

3. CAPRI CAPRI Training Session in Warzaw, June 26-30, 2006 3 Example from Agenda 2000 PGGRCU = {SWHE, RYEM, BARL …} Sets defined in policy\policy_sets.gms Definitions are hierarchical: EU MS NUTS2

4. CAPRI CAPRI Training Session in Warzaw, June 26-30, 2006 4 Partial decoupling Decision 1: Degree of coupling per premium Decision 2: How redistribute decoupled funds? –Farm specific payment –Regional flat rate premium Different amounts for grassland and arable land? Which regional level? –Additional payment for farms with certain cattle activities (Hybridmodell)

5. CAPRI CAPRI Training Session in Warzaw, June 26-30, 2006 5 Fund flows Premium definitions Reference production P Reference payments D1 Premium remaining coupled Decoupled Decoupled Decoupled D2 P Decoupled payments Farm Hybrid Grassland Arable land All land

6. CAPRI CAPRI Training Session in Warzaw, June 26-30, 2006 6 Files defining the policies Agenda 2000 is always read For simulations into the future, a standard MTR scenario is used Further scenarios are defined incrementally, as reforms of previously defined scenarios GAMS-files are named as the scenarios Agenda 2000: agenda.gms MTR standard mtrstd.gms Other scenario ScenarioName.gms

7. CAPRI CAPRI Training Session in Warzaw, June 26-30, 2006 7 Reports Sum of payments per activity Composition of payments per activity Cut factors (premium right shortage) Cost of premiums per region (MS-EU) Best explored using the XML-tool

8. CAPRI CAPRI Training Session in Warzaw, June 26-30, 2006 8 Simple scenarios Simulations for 2013, France, no market Together: Sheep and goats premium not decoupled Exercises pair-wise, any of the following: –Fully de-couple DPSCOW for France (=eps) –Fully de-couple DPGRCU for France (=eps) –Couple bull-premium (DPBULF) for France to 75% –Prepare to explain 10 min what happened! Income Premium Activity level

9. CAPRI CAPRI Training Session in Warzaw, June 26-30, 2006 9 Dual values Remember the first order conditions If revenues m rise for an activity… …the other terms must compensate Other endogenous terms: x and

10. CAPRI CAPRI Training Session in Warzaw, June 26-30, 2006 10 Dual values in CAPRI All outputs + Premiums + Variable inputs + Value of feed + Young animals + N,P,K + Land balance + Set aside + Quota rents + PMP levels + PMP feed = Unexplained rest (0) Report found in XML under Dual values m a BxBx Exercise: The groups describe their scenarios using dual values.