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Abstract
The paper explores the ecological effects of a policy change from coupled direct payments to decoupled single farm payments in a case study region in Germany. Since decoupling is expected to affect agricultural production and trade, both statically with respect to the incentive prices of agricultural inputs or outputs, and dynamically with respect to their investment decisions, we have developed a modelling approach that is built on two micro-economic models – AgriPoliS (agent-based) and MODAM (linear programming + fuzzy-logic-based environmental impact assessment). The model linking makes it possible to analyse dynamically both structural change of the farming sector and agricultural-management-related environmental impacts. Our analysis comes to ambiguous results. In comparison to Agenda 2000, payment decoupling leads to greater land abandonment and reduced stocking numbers, especially in the beef sector. On arable land, the trend goes towards intensification, while on grassland cross-compliance leads to a more extensive agricultural management.