Direct payments under the first pillar of the Common Agricultural Policy (CAP) represent the largest part of public funds received by active farmers. In 2016, these payments amounted to 4.84 billion euros in Germany. This means that about 280 euros per hectare are paid annually. In view of the further development of the CAP after 2020 and due to the great financial importance of direct payments for farmers, controversial discussions are being held on the future distribution of funds and the use of these payments for the best possible achievement of agricultural and environmental policy objectives. A much discussed topic is in particular the redistribution of direct payments in favour of smaller farms. In order to improve the information basis for negotiations, the Federal Ministry of Food and Agriculture (BMEL) has commissioned the Thünen Institute to analyse the effects of direct payments on structural change in agriculture. Special aspects of the investigation were capitalization of direct payments into land rental rates, the effects on farm structural change as well as economies of scale with regard to operating expenses and company profits. In order to make the results accessible to an interested public, the statement responding to questions of the BMEL is now published. The main findings of the investigation are: - Structural change in agriculture is influenced only to a small extent by direct payments. Differences in success between companies, scientific and technological progress and the natural, economic and legal framework conditions have a much stronger impact. - Against the background of a high overall share of leased land in Germany, an increasing proportion of direct payments has been capitalized into land value and therefore transferred to the owners of the land since the introduction of the decoupling of direct payments. - The amount of the transfer of the direct payments to the landowners varies considerably in some cases, depending on the period analysed, the region, the share of the lease and the investigation approach. - Large arable farms with a high proportion of own land benefit most from direct payments, while farms with a high value added per unit area (e.g. special crop and pig and poultry farms) and high shares of leased land benefit from these payments only to a relatively small extent. - Against the background of the discussion about degressive direct payments, the analysis of the national farm accountancy data network (FADN) shows a decrease of total costs per hectare of agricultural area up to farm sizes of 400 ha (arable farming) and 300 ha (dairy farms), while, especially in arable farming, profits per unpaid worker continue to increase significantly in even larger farm units. Nevertheless, the authors of the paper take a critical view of a capping or degressive granting of direct payments, as these lead to adjustments in farms which ultimately impair the intended impact. The authors conclude that political attempts to redistribute direct payments to certain groups or sizes of farms without explicit connection to the actual income situation of the individual farms have only a very limited potential to contribute to a more target-oriented income support.