Impact of the CAP Reform on the Spanish Agricultural Sector

Abstract

This paper analyses the impact of the 2003 CAP reform on Spanish agricultural sector in the context of the recent CAP Health Check and high food prices, using PROMAPA, a positive mathematical programming model for representative farms.The analysis compares the model results for base year 2002 to the findings for a scenario with the CAP reform measures in place, taking into account recent modifications. The effect of adopting a full decoupling scheme instead of the present partial decoupling is also studied.Brief descriptions are given of the PROMAPA model, the representative farm considered and the assumptions about both price variations and the policy measures simulated.The findings showed that the farming area for cereals grew substantially after abolition of the compulsory set-aside and that the impact of transition to full decoupling was scant, except in the sheep and rearing cattle sub-sectors, where it considerably steepened the already sizeable decline in livestock numbers induced by the partial decoupling scheme.