Modulation of direct payments within Agenda 2000 - A comparative analysis between France and Germany

Article 4 of the horizontal measures of Agenda 2000 opens the possibility t o the member states in modifying direct payments with regard to the volume of premia, labour input and the size of farms. In France, a scheme of modul ation was implemented this year. Model calculations on the base of farm acc ounting data are realised to assess the impacts of this scheme for French a nd German agriculture under conditions of the year 2004. In France about 59 ,000 farms would be affected by modulation and direct payments of farms con cerned would be reduced by 4,9 %. From the total savings of 160 Mio. epsilo n about 80 % are allotted to arable farms. In Germany about 16,000 farms wo uld be concerned; their premia would be shortened by 5,3 % and the total sa vings amounted to 100 million epsilon. The modulation scheme would affect o nly 4 % of individual firms, 30 % of partnerships but almost all legal enti ties. 90 % of the premium shortening would be allotted to the new Laender.