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Economic Impacts of CAP greening: application of an EU-wide individual farm Model for CAP analysis (IFM-CAP)

Abstract: 
This paper presents the first EU-wide individual farm level model (IFM-CAP) applied to assess the economic effects of CAP greening. IFM-CAP is a static positive programming model developed to capture the full heterogeneity across EU farms in terms of policy representation and impacts. Simulation results show that although the proportion of concerned farms and UAA (Utilised Agricultural Area) is sizable (55 % of all farms and 86 % of UAA, respectively) at EU-27 level, the reallocated area caused by CAP greening represents only 4.5 % of UAA. The farm income and total production decrease by 1 % and 0.9 %, respectively. In total around 29 % of the farm population is affected by CAP greening in EU-27.