Abstract
Payment entitlements is a new commodity that arises from the new European common agricultural
policy. The agricultural subsidies are decoupled from the actual production and replaced by the
so-called payment entitlements. A payment entitlement has a farm specific value and may be freely
traded. This paper discusses the complexity of this new market and suggests an auction that
simplifies the complexity. The suggested auction allows a buyer to simultaneously bid on all
payment entitlements. The prices are found by a tatonnement that monotonically approximates the
equilibrium prices for the different types of payment entitlements for sale. The auction enhances the
competition and efficiency of the market, which is essential for the individual members of the
European Union in order for them to receive their entitled subsidies.
| Original language | English |
|---|---|
| Title of host publication | The future of rural Europe on a global agri-food system |
| Number of pages | 15 |
| Publisher | European Association of Agricultural Economists (EAAE) |
| Publication date | 2005 |
| Pages | 1-15 |
| Publication status | Published - 2005 |
| Event | Seminar of the EAAE - Copenhagen, Denmark Duration: 24 Aug 2005 → 27 Aug 2005 Conference number: 99 |
Conference
| Conference | Seminar of the EAAE |
|---|---|
| Number | 99 |
| Country/Territory | Denmark |
| City | Copenhagen |
| Period | 24/08/2005 → 27/08/2005 |