The Degree of Decoupling of Area Payments for Arable Crops in the European Union

The present article uses individual farm data from the Farm Accountancy Data Network (FADN) European survey to estimate acreage and yield response to recent policy developments in selected countries. Unlike previous work, this article makes estimations for several EU countries (France, Germany, Italy, Spain, and United Kingdom) and uses reduced-form acreage and yield equations in order to capture the individual response to relative prices, relative area payment, and risk-related effects. The results of the estimations confirm the main hypothesis concerning the partial decoupling of the 1992 payment scheme, but the degree of decoupling varies widely for different commodities and countries.