Which parameters determine farm development in Germany?

In 2005, Germany implemented the Single Payment Scheme which lead to the conversion of direct payments into tradable, production decoupled, single farm payments. The transition from coupled to decoupled support instruments may impact the rate of structural change. The rate of structural change may accelerate since farms with a high share of income derived from CAP payments will abandon farming and lease their land. However, there are also good reasons why the rate of structural change might decrease especially if farmers do not behave as profit maximizers. In Germany agricultural land use is very heterogeneous with respect to management orientation and productivity even at local level. Most of the concerns related to structural change and development of land use intensity, e.g. abandonment of high nature value farmland, are only relevant in a very specific local context. Therefore, it is necessary to establish indicators for farm development on adisaggregated level. The objective of this paper is twofold. First, we derive criteria and threshold values to classify regions according to their respective natural, socio economic conditions and land use. Second, we evaluate the stability of the link between a set of explanatory variables and the rate of structural change at different spatial scales. Our results indicate that only for a few variables a generally valid link between them and the rate of structural change can be established. For the majority of the explanatory variables, their respective impact on structural change depends heavily on the regional context.