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The agricultural sector in Europe is heavily dependent on support payments made as part of the Common Agricultural Policy (CAP). In 2013, a political agreement on a CAP reform was reached that led to the introduction of a Basic Payment Scheme (BPS). The agreement allowed for a wide range of implementations across EU member states with BPS implementation options ranging from models with flat rate per hectare payments determined at regional or national level, to models where existing historically determined payment rates per hectare transition towards, but not to, a flat rate per hectare. This paper explores the role that such payments and changes in their distribution could play in reducing farm income inequality in the UK and Ireland. Flat rate per farm payments are also considered here to explore how a more dramatic reform would reduce inequality. Movement towards flat rate per hectare payments does not uniformly decrease inequality of Farm Net Value Added (FNVA) in contrast to what one may anticipate a priori, in fact in Wales, Scotland and Northern Ireland the inequality of FNVA increases in this analysis. In contrast, flat rate per farm payments reduce inequality substantially.


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