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ChallengesforModellingCAP2014–2020withinCGEModelFramework
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ceiling,thegreenpaymentisexcluded,andinadditionfarmscandeductsalary
costsincludingwagespaidtothefarmertoarriveattherelevantamount(Matthews
2013).Hence,thereisaminimumlimitofdegressivitybuttheupperboundisleft
open.
MemberStatescanvoluntarilyincreasetherateofreductiononamountsover
€150,000,uptoandincluding100%,meaningthat€150,000couldbethemaximum
amountthatcouldbepaidtoanyonefarmerasabasicpaymentafterdeductionof
salarycosts.MemberStateswhichoptfortheredistributivepaymentdonothave
toapplythemandatoryreduction,providedtheyuseatleast5%oftheirnational
envelopefortheredistributivepayment(Matthews2013).Thefundsreleasedstay
witheachMemberStateandwillberecycledtoruraldevelopmentprogrammes
withoutanyneedforco-financing.
Fromthemodellingpointofviewthispolicycanbeapproachedasinstudies
analysingmodulation,becauseinfactdegressivityreplacestheoldmodulation
policy,whichafterthe2008HealthCheckreducedpaymentsaboveEUR5,000by
10%in2013andpaymentsoverEUR300,000by14%(Matthews2013).Thedif-
ferencebetweenthedegressivityandmodulationis,however,thefollowing:the
percentagereductionislower,ithastoberememberedthatitappliesonlytothe
basicpaymentaftersalarycosts.Thenewpolicyleadstolessequaldistribution
ofpaymentsthanmodulationbutthedegreeofinequalitiesisconditionalonthe
mechanismofinternalconvergence,whetherornotaMemberStateoptsforthe
redistributivepaymentandforadditionalvoluntarydegressivity(Matthews2013).
Themostcomprehensivestudytacklingmodulation,whichcanalsobeusedfor
analysesofdegressivity,isbyNowickietal.(2009)wheremodulationismodelled
viaasetoflinkedmodels-economicmodels:LEITAP(CGEmodel),ESIM,FES,
CAPRI(PEmodel)andlanduseallocationmodelDyna-CLUE.Thedifficulties,
however,remainsimilarintermsofdataandimpactevidence.Whilereducing
directpaymentsisprettystraightforward,modellingthedistributionofthefunds
amongPillar2measuresremainsachallenge.Thisisbothduetomethodological
issues(howtotranslateprecisemeasuresdirectedtofarmersintogeneraleconomic
modelsworkingonsectorsandregions),andduetodataissues-lackofevidence
onhowtheRDPfundsareworkinginpractice,andonhowtheyarespent.
2.3.Greeningcomponentandequivalents
TheEChasproposedthreemandatoryugreening”activitieswhichneedtobe
implementedatfarmlevel:permanentgrassland,cropdiversification,andEco-
logicalFocusAreas.Therequirementsrelatedtogreeningare(EC2013a):
WieśiRolnictwo4(173)/2016
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