Impact of a Reform of the Common Agricultural Policy via Uncoupling

Jayet, Pierre-Alain

Impact of a Reform of the Common Agricultural Policy via Uncoupling - 2005.


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The reduction in the distortions to trade launched in 1992 and 1999 led the EU’s Common Agricultural Policy (CAP) to systematize the uncoupling of agricultural subsidies from agricultural production. This analysis focuses on the price effect and makes it possible to assess the expected advantages to society by means of model simulations under an assumption of constant European budgetary expenditure. Depending on the level of the uncoupling premium offered in substitution for existing subsidies, we note a change in the numbers of “losers” and “winners,” their location, and variation in surpluses, with the benefit to producers and taxpayers unchanged at €1.8 billion for the 15-member EU compared with Agenda 2000. This amount would be €0.8 billion in the case of partial uncoupling similar to that contained in the 2003 Luxembourg Agreement.

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