German Farmers’ Perspectives on Direct Payments in the Common Agricultural Policy

Abstract

Summary After several reforms of the Common Agricultural Policy and gradual liberalisation, direct payments that serve to stabilise farm incomes remain highly pertinent for EU farmers in that they continue to contribute a high share of total farm income. This was also reflected in our survey of German farmers’ perspectives on direct payments, which showed the importance that these payments play in their financial situation. However, several economists have pointed to the lack of justification for poorly targeted direct payments in achieving societal goals, namely the delivery of valued public goods. In particular, the surveyed German farmers also recognised societal disapproval of the direct payment scheme. However, without direct payments, an accelerated structural change in German agriculture is very likely, leading to larger, less diversified farms and more intensive farming; which contrasts with the expectations of the German society for the agriculture sector. As German tax payers contribute substantially to financing the CAP, societal approval in terms of animal welfare and environmental services should receive greater priority in the direct payment scheme. The latter could be achieved by a well‐aimed targeting of direct payments, providing compensation for farmers producing agri‐environmental public goods and/or clearly contributing to improved animal welfare.

Cultivating Support: An Ex-Ante Typological Analysis of Farmers’ Responses to Multi-Peril Crop Insurance Subsidies

“…Insurance companies, therefore, should enhance transparency concerning insurance premiums. Across all clusters, there is a consistent call to maintain the financial resources allocated for direct payments, reflecting their importance in farmers' incomes as noted by Michels et al (2020).…”

“…The data reveals farmers' ambivalence regarding governmental intervention in the insurance sector. They appear favorable to the idea of additional funds for insurance subsidies, but express reservations about reallocating funds, especially from established avenues like the CAP's direct payments which is in line with Möllmann et al (2019) and Michels et al (2020). Likewise, using money from the 2 nd pillar as it is intended in the CAP is not really approved by the farmers.…”

German Farmers’ Perspectives on Price Drivers in Agricultural Land Rental Markets—A Combination of a Systematic Literature Review and Survey Results

“…The price drivers considered in this study are non-static price drivers that change over time and, thus, have a changing impact on rental prices. The procedure of combining survey data with a literature review and the discussion of both simultaneously was also used by Michels et al [24] to capture German farmers' perspectives on direct payments in the European Union. Ergo, the presented study proceeds in three successive steps: first, the systematic literature review is used to identify the price drivers pinpointed in the primary literature.…”