An Analysis of the Potential Impact of Decoupled Payments: An Irish Case Study Une analyse de l’impact potentiel des paiements découplés : une étude de cas irlandaise Eine Analyse der potenziellen Auswirkung von entkoppelten Zahlungen: Eine Fallstudie aus Irland
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Media type:
E-Article
Title:
An Analysis of the Potential Impact of Decoupled Payments: An Irish Case Study Une analyse de l’impact potentiel des paiements découplés : une étude de cas irlandaise Eine Analyse der potenziellen Auswirkung von entkoppelten Zahlungen: Eine Fallstudie aus Irland
Contributor:
Howley, Peter;
Donnellan, Trevor;
Hanrahan, Kevin
Description:
<jats:title>summary</jats:title><jats:p>An Analysis of the Potential Impact of Decoupled Payments: An Irish Case Study</jats:p><jats:p>Decoupled payments are in the World Trade Organisation’s (WTO) ‘green box’ of agriculture‐related subsidies and thus must adhere to the fundamental requirement that the policy has no, or at most minimal, trade‐distorting effects. The question as to whether decoupled payments affect production is an important issue in the context of international trade, as these payments can be exempt from WTO limits if they have none or at most, minimal, trade distorting effects. Using a dynamic multi‐product partial equilibrium model, this article provides projections for cereal and beef production in Ireland between 2005 and 2020 under the alternate assumptions of full (decoupled payments have the same impact as output prices) and zero (decoupled payments have no impact on production) coupling. The projections from the model were then compared with actual real market data in Ireland. The results suggest that if decoupled payments are treated by farmers as being ‘truly’ decoupled then there is likely to be a substantial decline in agricultural production in Ireland. Our model results suggest, however, that grain and cattle farmers in Ireland do not consider these payments as fully decoupled which calls into question the appropriateness of decoupled payments being included as a ‘green box’ policy.</jats:p>