Using administrative data to model CAP reform options (PPT 442KB)

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Using administrative data to
model CAP reform
Sinéad McPhillips
Economics & Planning Division
Department of Agriculture, Food & the Marine
Kevin Hanrahan
Agricultural Economics and Farm Surveys Department
Teagasc
Overview
 Commission proposals on SFP
 DAFM analysis
 Irish “internal convergence” proposal
 Comparisons with other proposals
 Modelling by Teagasc on farm types
 Conclusions
COMMISSION PROPOSALS ON SFP
 Distribution of Direct Payments within
Member States (‘internal convergence’):
 Progressive movement to uniform national
or regional payment rates per hectare by
2019
 Entitlements based on eligible hectares
declared in 2014 by active farmers with at
least one entitlement in 2011
DAFM analysis
 Modelling based on DAFM administrative data
 Objective: To quantify effects of Commission proposals, &
to develop and propose alternatives
 Administrative data collected by DAFM (such as contained
in the SPS application form) provides a wealth of useful
data
 eligible area
 payment amount
 stocking density
2010 SPS database
Average payment
per hectare
category, 2010
No of farmers
Total Area
2010 SPS Payment
Average
Area (ha)
Average payment
per ha (2010)
0 payment, some
area
7,955
144,159
0
18.1
0.00
0 to 20
1,963
67,579
771,200
34.4
11.41
20 to 50
4,176
179,217
6,512,194
42.9
36.34
50 to 100
10,482
397,131
29,951,263
37.9
75.42
100 to 150
13,135
423,446
53,110,201
32.2
125.42
150 to 200
15,462
493,919
86,753,342
31.9
175.64
200 to 250
16,953
571,978
128,911,363
33.7
225.38
250 to 300
16,709
603,410
165,984,643
36.1
275.08
300 to 400
25,936
1,025,283
354,750,285
39.5
346.00
400 to 500
11,084
473,984
209,656,007
42.8
442.33
500 to 600
4,446
197,559
107,207,633
44.4
542.66
600 to 700
1,815
80,239
51,594,069
44.2
643.01
700 to 800
803
33,006
24,678,914
41.1
747.71
800 to 900
378
16,388
13,801,287
43.4
842.13
900 to 1,000
167
5,947
5,648,677
35.6
949.88
1,000+
338
7,726
9,182,251
22.9
1,188.44
131,802
4,720,971
1,248,513,329
35.8
264.46
All
2010 SPS payment distribution
2010 SPS Payment
1,000+
900 to 1,000
800 to 900
700 to 800
1%
600 to 700
1%
500 to 600
3%
400 to 500
300 to 400
250 to 300
200 to 250
150 to 200
100 to 150
50 to 100
20 to 50
3%
0 to 20
1%
0 payment, some…
0%
5%
No of farmers
8%
20%
13%
13%
12%
10%
8%
6%
10%
15%
20%
25%
30%
Models analysed
 Flat rate national
 Flat rate at NUTS 2 & NUTS 3 level
 Regions based on stocking density
 All resulted in large transfers within
regions/local area as well as between
regions
Example: Average payment per ha by
NUTS III region, 2010
350
337
310
300
300
283
264
258
250
216
207
200
150
100
50
0
Border
Midlands
West
Dublin
Mid East
Mid West
South East
South West
IRISH PROPOSAL ON INTERNAL
CONVERGENCE
 “Approximation” - move towards the average
 Applies to the whole payment (green and basic)
 Based on commission’s proposals for external
convergence
 Results; average gains of 29% for 65,000 farmers,
average losses of 9% for 56,000. Those with
highest payments lose most.
 5 Member States supportive (Spain, Portugal, Italy,
Denmark and Luxembourg)
Irish Proposal – Internal Convergence Breakdown
Payment category (SPS euro per ha 2010)
0 to 20
20 to 50
50 to 100
100 to 150
150 to 200*
200 to 238.01
GAIN
NO CHANGE: 238.02 TO 264.46 (90% to 100%)
264.47 to 300
300 to 400
400 to 500
500 to 600
600 to 700
700 to 800
800 to 900
900 to 1,000
1,000+
LOSS
TOTAL
No of farmers
1,939
4,129
10,350
12,998
15,300
12,712
65,052
% change compared to 2010
+662%
+185%
+72%
+30%
+12%
+3%
+29%
8,943
11,717
25,658
10,919
4,368
1,763
769
348
153
221
55,916
129,911
-2%
-6%
-11%
-14%
-16%
-17%
-18%
-19%
-21%
-9%
+0%
Note: All figures are estimates only, based on modelling exercises carried out by DAFM, using eligible area and
actual payments to farmers in 2010, in order to analyse the overall impact of alternative proposals on Irish farmers.
OTHER PROPOSALS EMERGING
 However, other Member States have other
ideas
 In addition, other proposals are coming
from the European Parliament all the time –
this is a moveable feast
 CAP reform now s.t. “ordinary legislative
procedure”,
 i.e. co-decision of Council and Parliament
Comparative Analysis: Commission, Capoulas Santos (EP)
and Irish Minister’s Proposals
Commission
Capoulas Santos
proposals proposals on internal
national flat rate
convergence
No. of farmers gaining
Average % loss
No. of farmers losing
Average % loss
Total transfers €m
Ireland's proposal External
convergence
approach
73,995
73,995
65,052
+85%
+56%
+29%
-
-
8,943
55,916
55,916
55,916
-33%
-23%
-9%
€297m
€197m
€79m
Note: All figures are estimates only, based on modelling exercises carried out by DAFM, using eligible area and actual
payments to farmers in 2010, in order to analyse the overall impact of alternative proposals on Irish farmers.
MODELLING BY TEAGASC
 Adding data from the AIM and other DAFM
databases (animal numbers and type)
 So as to allow farms to be categorised
according to the FADN farm typology
 Similar approach to that used in Census of
Agriculture typing of farms
 Useful for CAP negotiations
 Database could be adapted for a variety of
analytical purposes
SPS Payment Share of FFI by Farm System (NFS 2010)
impact on income of a euro
change in subsidy
depends on the farming system’s
subsidy dependence
120%
100%
80%
60%
40%
20%
0%
Dairying
Cattle
Cattle
Rearing
Other
Teagasc 2010 NFS (Hennessy et al. 2011)
Sheep
Tillage
Mixed All Farms
Livestock
Farms by Farm System and Economic Size
40,000
35,000
number of farms
30,000
25,000
20,000
15,000
10,000
5,000
0
DY
ML
1 ESU = €1,200 SO
S ≤ 8 ESU; 8<M≤40 ESU; L>40 ESU
CR
CO
S
M
SH
L
P151
NP151
Flat Rate Payment Model (EC proposal)
Winners and Losers by system
W= 75,011 & L = 56,764
25,000
Numbers of farms
20,000
15,000
10,000
5,000
0
Dairying
Mixed
Livestock
Cattle
Rearing
Cattle
Other
Sheep
P151
NP151
Results from Teagasc analysis
 Reform is a zero-sum game
 If there are losers there are winners/If there are winners there are
losers
 Specialist dairying and tillage, which are more intensive systems,




have more losers than winners, but still a substantial number of
winners.
Drystock farms, by contrast, have more winners than losers, but still
have a surprising number of losers.
Largest absolute gains/losses on those farms that are larger
recipients of DP
Larger relative gains on farms with smaller DP receipts
Doesn’t make sense to talk about “cattle men winning” and “dairy
men losing” – there are winners and losers in all farm types
Cattle Rearing: SPS subsidy/ha
800
EC proposals
14000
700
12000
10000
500
8000
400
6000
300
4000
200
2000
100
0
0
0-1000
10002000
2000- 5000- 10000- 15000- 20000- 25000- 30000- 40000- >50000
5000 10000 15000 20000 25000 30000 40000 50000
Winners
Losers
n
farms
SPS euro/ha
600
Cattle Rearing Farm System: SO/ha
900
EC proposals
14000
800
12000
700
10000
500
8000
400
6000
300
4000
200
2000
100
0
0
0-1000
10002000
2000- 5000- 10000- 15000- 20000- 25000- 30000- 40000- >50000
5000 10000 15000 20000 25000 30000 40000 50000
Winners
Losers
n
farms
euro SO/ha
600
Dairy: SPS subsidy/ha
700
EC proposals
6000
600
5000
500
400
3000
300
2000
200
1000
100
0
0
0-1000
10002000
2000- 50005000 10000
10000- 15000- 20000- 25000- 30000- 40000- >50000
15000 20000 25000 30000 40000 50000
Winners
Losers
n
farms
SPS euro/ha
4000
Dairy Farm System: SO/ha
EC proposals
6000
2,500
5000
2,000
4000
1,500
3000
1,000
2000
500
1000
0
0
0-1000
10002000
2000- 5000- 10000- 15000- 20000- 25000- 30000- 40000- >50000
5000 10000 15000 20000 25000 30000 40000 50000
Winners
Losers
n
farms
euro SO/ha
3,000
CONCLUSIONS
 Detailed administrative data allows more precise
modelling of the effects of policy change
 Can provide insights not provided by other data
 Particularly useful when comparing one proposal
against another
 Still have to bear in mind that they are just models
 Not predictive of what will happen in the real world
 Cannot provide information on income or production
effects
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