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Impact analysis of the CAP reform proposals

This publication brings together the main findings of two impact analyses of the January 2003 proposals for the reform of the Common Agricultural Policy on the agricultural markets and income of the European Union over a medium-term perspective.

The studies show that the Commission's proposal to severe the link between production and subsidy ("de-coupling") would favour the extensification of production and would secure significant income gains for EU farmers. According to the analysis, farm income would increase by 8.5 % compared to 2001. As to a scenario based on the existing policy (Agenda 2000), the income impact would be largely neutral for EU-15 (-0.1% in 2009). While beef production in the EU-15 would fall by 2.7% in the medium-term, beef producers would see a price increase by 7% by 2009. As to an enlarged EU-25, for the new Member States the CAP reform would secure the income gains generated by the enlargement. In 2009, market income would increase by 17% in real terms as compared to the situation in 2002 without enlargement. Taking account of the phasing-in of direct payments and rural development, this real income increase could reach more than 45%. De-coupling in the new Member States would produce similar trends to those in the EU-15, as producers’ decisions would be driven by market considerations rather than by the maximisation of farm subsidies.

Published in March 2003.

 

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"Reform of the common agricultural policy: A long-term perspective for sustainable agriculture - Impact analysis"
[pdf, 278 KB]

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