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Th e paper presents key results regarding a possible reform of the Common Agricultural Policy direct payments, based on a scenario analysis by the CAPRI (Common Agricultural Policy Regionalized Impact) modelling system. Combining aggregate programming models at the NUTS 2 level with a global spatial multi-commodity model, it enables depicting the impacts of diff erent policy and economic scenarios from regional to the global scale. Th e paper discusses simulated impacts on farm income and agricultural markets from implementing the European fl at rate hectare payment corrected for the purchasing power disparities across the Member States while reducing the overall budget outlays for direct payments by 50% and dismantling the remaining coupled support to ruminants. Th e results are an outcome of a comparative static analysis against a reference scenario which assumes the Health Check policy in 2020. Th e model results suggest a drop of the agricultural gross value added by 9% at the aggregate EU27 level compared to the reference scenario. Impacts diff er between the Member States groups, Member States and regions, depending on the share of premiums in the income from agriculture, specialization and competitiveness of production. Th e largest reduction is projected for the suckler cow herd, dropping by 6% compared to the reference scenario. Th e drop is caused by removing the coupled support and aff ecting mostly the herds in Spain and France.

Flattening and redistribution of the CAP direct payments for the EU27 regions