The effect of decoupling on marginal agricultural systems: implications for farm incomes, land use and upland ecology

Citation

Acs S, Hanley N, Dallimer M, Gaston KJ, Robertson P, Wilson P & Armsworth PR (2008) The effect of decoupling on marginal agricultural systems: implications for farm incomes, land use and upland ecology. Stirling Economics Discussion Paper, 2008-18.

Abstract
In many parts of Europe, decades of production subsidies led to the steady intensification of agriculture in marginal areas, but the recent decoupling of subsidies from production decisions means that the future of farming in these areas is uncertain. For example, in the uplands of the United Kingdom, an area important both for biodiversity conservation and ecosystem service provision, hill farmers steadily increased stocking densities in response to headage payments but must now reconfigure farm businesses to account for the shift to the Single Farm Payment scheme. We examined hill farming in the Peak District National Park as a case study into the future of marginal agriculture after decoupling. We surveyed 44 farm businesses and from this identified six representative farm types based on enterprise mix and land holdings. We developed linear programming models of production decisions for each farm type to examine the impacts of policy changes, comparing the effects of decoupling with and without agri-environment and hill farm support, and evaluating the effects of removal of the Single Farm Payment. The main effects of decoupling are to reduce stocking rates, and to change the mix of livestock activities. Agri-environmental schemes mediate the income losses from decoupling, and farmers are predicted to maximise take up of new Environmental Stewardship programmes, which have both positive and negative feedback effects on livestock numbers. Finally, removal of the Single Farm Payment would lead to negative net farm incomes, and some land abandonment. These changes have important implications for ongoing debates about how ecological service flows can be maintained from upland areas, and how marginal upland farming communities can be sustained.

Keywords
CAP reform; de-coupling; ecological-economic modelling; upland farming

JEL codes

• Q12: Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
• Q57: Ecological Economics: Ecosystem Services; Biodiversity Conservation; Bioeconomics; Industrial Ecology