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Abstract
The purpose of the paper is to present an agricultural supply model for Scotland used to estimate
regional changes in agricultural outputs due to the 2003 Common Agricultural Policy (CAP) reform.
Supply functions were estimated for several farm types based on generalised trans-logarithmic
multiproduct cost functions (Caves, Christensen and Tretheway, 1981). The data used for the
estimation were an unbalanced panel dataset constructed using farm level data from the Scottish
Executive’s Farm Accounts Scheme (FAS) survey. Using the estimated supply adjustments, individual
farm level responses to subsidy and price changes were aggregated using agricultural census weights
to estimate the output changes for different regions.