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Abstract
In 2005, Germany implemented CAP decoupled payments. Direct payments were converted
into tradable, production decoupled, single farm payments (SFP) by a hybrid model. From
2010 - 2013, there will be a gradual transition to a regional model. The following paper
shows the results of an analysis of the market for payment entitlements in Germany between
2005 and June 2007. Data are derived from the German Central IACS database (ZID). In this
period 1.2 of the 17 million payment entitlements changed their owner. A closer look at the
figures reveals that despite a large difference in the face value of the entitlements, the
entitlements are rarely traded in order to optimize farm budget. In most cases, trade of
entitlements is directly linked to farm or land transfer. As a consequence, the overwhelming
majority of trade takes place on the local level with very little redistribution of direct
payments on a regional level being observed. Differences between the thirteen German
trading regions with respect to observed trade patterns are quite small.