Distributional Impacts of Agricultural Policy in West Germany – from the Sectoral Level to the Single Farm : contributed paper presented at the 133rd EAAE seminar, 15.-16.6.2013, Chania, Crete

Abstract

There is a growing public and political interest in effects of agricultural policy on income distribution in the agricultural sector. However, tools for an ex-ante analysis of impacts of sectoral or macroeconomic policies on the individual farm income level can hardly be found for the agricultural sector. Most of the literature regarding redistributive effects of agricultural policy is ex-post and static in nature. Against this background, the main objective of this paper is to develop a tool that is able to consistently assess impacts of sectoral policy on individual farm incomes, thereby building up on existing approaches of model coupling and taking behavioural effects into account. For illustrative purposes redistributive effects of different liberalization scenarios of European agricultural policy on the West German agricultural sector are analysed. The analysis of inequality effects based on individual data is compared to an analysis based on more aggregate farm groups. It is revealed that the amount of inequality may be seriously underestimated when only taking grouped data into account. Redistributive effects of liberalization scenarios differ slighty in absolute terms and more in relative terms.