Budgetary Impacts of Adding Agricultural Risk Management Programmes to the CAP

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dc.citation.issue2
dc.citation.volume72
dc.contributor.authorPieralli S
dc.contributor.authorPérez Domínguez I
dc.contributor.authorElleby C
dc.contributor.authorChatzopoulos T
dc.date.available2021-06
dc.date.issued2021-06
dc.descriptionThis is an open access article under the terms of the Creative Commons Attribution License, which permits use, distribution and reproduction in any medium, provided the original work is properly cited.
dc.description.abstractVolatile prices and income uncertainties are major issues for farmers, leading to a demand for policies that mitigate such risks. However, the budgetary consequences of risk management schemes are uncertain due to their dependence on market prices. Using an agricultural multi-commodity market model, we evaluate the potential budgetary consequences of introducing two specific risk management schemes used in the United States into the European Union Common Agricultural Policy (CAP), namely the Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) programmes. Our analysis considers three sets of reference prices and stochastic uncertainty related to yields and macroeconomic conditions, resulting in a joint distribution of agricultural outputs and support payments. The results show that the payments from these two risk management schemes are sensitive to the reference prices triggering support and to the programme participation shares. In the most extreme stochastic simulations, support payments from the PLC programme reach €23 billion while support payments from the ARC programme reach €2.1 billion for the three crops considered (barley, wheat and maize).
dc.description.publication-statusPublished
dc.format.extent370 - 387
dc.identifierhttp://gateway.webofknowledge.com/gateway/Gateway.cgi?GWVersion=2&SrcApp=PARTNER_APP&SrcAuth=LinksAMR&KeyUT=WOS:000575789400001&DestLinkType=FullRecord&DestApp=ALL_WOS&UsrCustomerID=c5bb3b2499afac691c2e3c1a83ef6fef
dc.identifier.citationJOURNAL OF AGRICULTURAL ECONOMICS, 2021, 72 (2), pp. 370 - 387
dc.identifier.doi10.1111/1477-9552.12406
dc.identifier.eissn1477-9552
dc.identifier.elements-id434268
dc.identifier.harvestedMassey_Dark
dc.identifier.issn0021-857X
dc.identifier.urihttps://hdl.handle.net/10179/15736
dc.publisherJohn Wiley and Sons Ltd on behalf of Agricultural Economics Society
dc.relation.isPartOfJOURNAL OF AGRICULTURAL ECONOMICS
dc.subjectAgricultural policy
dc.subjectbudgetary impacts
dc.subjectCAP
dc.subjectmarket outlook
dc.subjectrisk and uncertainty
dc.subjectsimulation
dc.subjectstabilisation and risk policies
dc.subject.anzsrc0401 Atmospheric Sciences
dc.subject.anzsrc1402 Applied Economics
dc.titleBudgetary Impacts of Adding Agricultural Risk Management Programmes to the CAP
dc.typeJournal article
pubs.notesNot known
pubs.organisational-group/Massey University
pubs.organisational-group/Massey University/College of Sciences
pubs.organisational-group/Massey University/College of Sciences/School of Agriculture & Environment
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