Institute of Agricultural Ecomonics, Swiss Federal Institute of Technology, Zurich

A new concept for direct payments related to land use in the mountain region

n this article, the system of direct payments linked to land use – so-called site-specific payments – is evaluated. Model calculations for the Swiss Alpine region show that a regional differentiation of these payments results in efficiency gains. Any new organisational concept for direct payments in the mountain region must distinguish between the objective of guaranteeing farmers’ revenues and the objective of ensuring land management. This means that site-specific payments are only granted to the extent that ensures the fulfilment of the land management objective. Losses in revenue can be compensated by a revenue policy objective using resources saved thanks to a more efficient system of site-specific payments. These socially-motivated payments should be granted according to distribution criteria and be subject to a time limit. Upper limits on income and assets should no longer be applicable. This form of new concept for direct payments would discourage unprofitable farms from continuing their land management activities and improve the mobility of the production factor land. The resources saved as a result of the increased efficiency of agricultural policy can be used in rural areas within the scope of an integrated regional development policy.

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