CAP reform and the rebalancing of support for cereals and oilseeds: a farm-level analysis

This pager assesses the impact of current market conditions and Agenda 2000 CAP reforms, particularly the 'rebalancing' of support between cereals and oilseed crops, on crop gross margins and hence on the incentive to produce oilseed rape on three representative farm types in eastern England. Result s indicate that under a conventional rotation, oilseed rape area falls subs tantially on two of the farm types considered. However, the incentive to pl ant break crops more frequently increases after the reform; under a two-bre ak crop rotation, oilseed rape area remains at pre-reform levels. Oilseed r ape prices of c. pound 100 per tonne, particularly when combined with unres tricted set-aside rates, conventional rotations and low cereal prices, woul d give farmers in eastern England substantial incentives to reduce the area of the crop grown.