A core element of the recent Common Agricultural Policy reform is to decouple payments that are merely linked to production from 2005 on. These subsidies are classified as environmentally harmful by OECD. An agricultural sector model, using a modified version of the positive mathematical...

The Common Agricultural Policy (CAP) has evolved from an allocative towards a dis-tributive policy. Distributive policies aim at correcting market outcomes according to politi-cally determined objectives usually through transferring money from richer to poorer house-holds. We compare the...