Impact analyses of the July 2002 "Mid-term review" proposals
In early 2003 the European Commission published a series of impact studies, which support the overall orientation of its proposals from July 2002 to review the Common Agricultural Policy (CAP).
The studies indicated that "decoupling" aid from production would result in production adjustments where needed, but would clearly not lead to production abandonment.
The studies also highlighted that the reforms envisaged by the Commission would significantly improve market balances. This means that in the future taxpayers' money would not be spent on financing unsaleable food mountains.
The Commission's concept to reduce direct payments and shift more money to rural development, the so-called modulation, would impact little on markets.
Thee most important result of the simulations was that there would be a positive effect on overall farm income.
The main impact of decoupling would be seen in the beef sector. The impact in the arable crops would be minor. This is the result of the fact that the current system at the time was already decoupled to a large extent, meaning that adjustments in production would be limited.