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Research article2017Peer reviewed

Is Passive Farming A Problem for Agriculture in the EU?

Brady, Mark V.; Hristov, Jordan; Sahrbacher, Christoph; Soderberg, Torben; Wilhelmsson, Fredrik

Abstract

We address a new agricultural policy concern following the decoupling of CAP direct payments in 2005: passive farming, whereby landowners maintain their agricultural area to collect payments without producing commodities. It is claimed that passive farming is hindering agricultural development by 'blocking' access to farmland for expanding farmers. We evaluate the links between the EU's Single Payment Scheme (SPS), passive farming, land use and agricultural development. Following identification of the rational landowners' optimal land-use choice, we evaluate the effects of the SPS using a spatial, agent-based model that simulates farmers' competition for land in a case-study region of Sweden. We show that passive farming does not constrain land from being used in production; on the contrary more land is used than would be the case without the SPS. We conclude that passive farming is not a problem for agriculture, but provides public goods that would otherwise be under provided: preservation of marginal farmland and future food security. However SPS payments on highly productive land inflate land values (capitalisation) and slow structural change, which hinder agricultural development. Consequently CAP goals could be better served by targeting payments on marginal land and phasing out payments to highly productive land.

Keywords

CAP; decoupling; development; fallow; land use; policy; Single Payment Scheme

Published in

Journal of Agricultural Economics
2017, Volume: 68, number: 3, pages: 632-650
Publisher: WILEY

      SLU Authors

        Sustainable Development Goals

        SDG2 Zero hunger

        UKÄ Subject classification

        Agricultural Science

        Publication identifier

        DOI: https://doi.org/10.1111/1477-9552.12224

        Permanent link to this page (URI)

        https://res.slu.se/id/publ/94193