CAP post 2022 scenarios and income impacts – a case analysis for selected typical farms in Slovenia

Jaka ŽGAJNAR; Luka JUVANČIČ; Stane KAVČIČ; Emil ERJAVEC

doi:10.14720/aas.2021.117.2.2116

Authors

Jaka ŽGAJNAR University of Ljubljana, Biotechnical Faculty, Department for Animal Science, Slovenia
Luka JUVANČIČ University of Ljubljana, Biotechnical Faculty, Department for Animal Science, Slovenia
Stane KAVČIČ University of Ljubljana, Biotechnical Faculty, Department for Animal Science, Slovenia
Emil ERJAVEC University of Ljubljana, Biotechnical Faculty, Department for Animal Science, Slovenia

DOI:

https://doi.org/10.14720/aas.2021.117.2.2116

Keywords:

direct payments, CAP strategic plan, farm model, impact assessment

Abstract

Assessment based on representative farms is an established approach in the modern assessment of the effects of changes in agricultural policy. In line with previous CAP reforms, we can expect income redistribution impacts also with the implementation of the legislative and financial framework of the CAP for the next period. This paper discusses a scenario analysis using the farm model. The model is based on linear programming, which enables to address various technological challenges at farm level. We formed the scenarios for the analysis following the example of the scenarios contained in the impact assessment that the European Commission prepared for the CAP after 2020. The analysis involves selected farm types from selected sectors. The results suggest that the expected reduction in the envelope will generally lead to lower farm-level revenues from CAP direct payments. Consequently, economic performance will deteriorate, what is likely to be amplified in some sectors by the abolition of historical payments. The range of consequences at farm level will likely be considerable, especially for sectors and production types with a high share of CAP payments in the structure of total farm income. In certain sectors, however, there is even an improvement regarding the current situation.

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