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Policy briefFarmer income and decoupled direct payments in North Macedonia 2023
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No results found.This policy brief summarizes the key findings and policy recommendations of the corresponding working paper “Decoupling direct payments in North Macedonia: impacts on farmer income”. North Macedonia’s ambition to join the European Union requires reforms of the agricultural sector and subsidy system. One major reform is the alignment to the rules of the Common Agricultural Policy (CAP) of the European Union on direct payments, including the “decoupling” of direct payments from production quantities. The decoupling of direct payments is likely to have significant impacts on production decisions, prices and therefore on farmer income. This paper identifies four possible scenarios for North Macedonia to align the direct payment scheme to the regulations of the European Union and subsequently analyses the impact of each scenario on farmers' income, using an ex ante analysis method in the form of a static microsimulation approach and the farm accountancy data network (FADN) data at individual farm level. The results show that, on average, farmer income increases when direct payments are decoupled in North Macedonia. We further test for heterogeneity and identify different effects along farm types and economic farm size – and find that some farmers would exhibit income losses as a result of the reform (i.e. specialist cattle, mixed crops and livestock farmers). -
Book (series)Exploring the decoupling of direct payments to farmers in North Macedonia
FAO Agricultural Development Economics Policy Brief 30
2020Also available in:
No results found.North Macedonia’s ambition to join the European Union (EU) makes it necessary to reform the agricultural sector, such that it aligns with the EU Common Agricultural Policy (CAP). This involves the “decoupling” of farm subsidies, i.e. a shift to payments that are not linked to area and production levels of specific commodities, livestock numbers, and input use. The decoupling of direct payments has significant impacts on production decisions, prices and therefore on farmer’s income. The study underlying this policy brief identifies five possible scenarios for North Macedonia to align their direct payment scheme with EU regulations and analyses the impact on farmer’s income. The results show that on average farmer’s income increases through the decoupling of direct payments in North Macedonia, with small farmers having a positive effect on income while bigger farmers experience a negative impact. To allow for a smooth alignment with the CAP in North Macedonia, a gradual phase-in of direct payments measures is recommended. -
Book (stand-alone)Lessons learned from the introduction of land consolidation in North Macedonia during 2014–2023 2023
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No results found.Since 2014, North Macedonia has developed into the flagship country for FAO support to land consolidation in Europe and Central Asia. The first small technical assistance project began in 2014. During 2017–2022, support to the national land consolidation programme was scaled up with European Union IPA funding through the FAO-implemented MAINLAND project. In August 2022, a second EU IPA-funded and FAO-implemented project “Enhancing land consolidation in North Macedonia” was launched and will continue until 2026 in close collaboration with the Ministry of Agriculture, Forestry and Water Economy. From the beginning, the Government of North Macedonia’s vision has been to build up and implement a fully operational national land consolidation programme. In addition to the mentioned core land consolidation activities and projects, FAO has in North Macedonia in the same period provided technical assistance to a number of land policy-related activities, including to the privatization of state-owned agricultural land, addressing land abandonment and supporting the development of agricultural land markets. This publication aims to document the lessons learned from the introduction of a land consolidation instrument in North Macedonia during the period 2014–2023. The purpose is to share the experiences with land consolidation, which will also be of great relevance for other countries in Europe and Central Asia and beyond that are in the process of introducing land management instruments such as land consolidation and land banking. The structural problems in agriculture with small average farm sizes, excessive land fragmentation, water scarcity, need for modern irrigation systems and weak agricultural land markets are also present in several countries in North Africa, the Near East and South East Asia. In some of these countries, there is also an increased interest in the introduction of land consolidation instruments.
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