Assessing the impacts of decoupling EU direct payments from agricultural production and the potential for 're-coupling'

With the recent reform decided in June 2003, the EU Common Agricultural Policy (CAP) will fundamentally change the support of agriculture. In this contribution, impacts of decoupling as the core reform element are assessed from a theoretical point of view and using an explorative modelling exercise for Brandenburg, a less favoured region in Germany. Special attention is paid to interactions with other policy measures such as agri-environmental schemes and support of renewable energy from biomass. A good understanding of farming in marginal areas is needed, as major impacts on production and on the environment can be expected from the abandonment of agricultural production in such areas.