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Economic Evaluation of Set Aside - ER02011

Set aside forms an integral part of the Arable Area Payments Scheme (AAPS) of the CAP. Although a voluntary scheme had operated in the UK from 1988, obligatory set aside was introduced in 1993 under the AAPS, following the 1992 CAP reform agreement. The original objective of set aside was to constrain cereal production in order to control purchases into intervention and the expensive exportable surplus. To qualify for area payments all arable farmers, except those claiming on a small area, are obliged to set aside a certain portion of their land. Farmers receive area payments on this land as well as on the cropped area.

Although set aside was originally intended as a production control tool, it has also had environmental benefits, largely owing to the non use of land and the management rules. Consequently changes to, or removal of, set aside requirements could have significant impact on the farmland environment.

However, the use of set aside as a policy instrument has a distortionary effect on the use of resources within agriculture with potentially major implications for the economic efficiency of the sector and effects on producers, consumers, taxpayers and overall economic welfare. With the forthcoming review of the CAP cereals regime in 2002, there is a need to consider the wider effects of set aside against a range of alternative policy scenarios. The results of this evaluation will enable MAFF to inform its assessment of the available options for reform in the context of EU negotiation, including the extent to which the environmental benefits arising as a result of set aside might be delivered more efficiently.
Project Documents
• Final Report : Economic Evaluation of Set Aside   (417k)
Time-Scale and Cost
From: 2000

To: 2001

Cost: £25,613
Contractor / Funded Organisations
University - Cambridge
Agriculture and Food Chain              
Arable Areas Payment Scheme (AAPS)              
CAP Reform              
Economic Policy Evaluation              
Set Aside