Implementation and impacts of SPS in Germany
In Germany, the SPS was implemented in 2005, and nearly complete decoupling of direct payments was carried out. Starting as a hybrid model combining area-based entitlements and individual farm top-ups, the entitlement levels will be harmonised for all eligible areas, but regionally differentiated by Bundeslander by 2013. Also, a regional equilibration of premium volume is being carried out between the federal states, changing the former Lander budget by -5 to +14 %. The gradual transformation over time is being realised with a hybrid model. Regionalised area-related payment claims are combined with farm individual top-ups which are based on part of the livestock premia and on the total of milk and sugar premia. Levels of the payment claims and their temporal development are illustrated in Figure 9.2. In 2005, the level of the payment claims for arable land (including land set-aside) was about EUR 300/ha, while for grassland it was about EUR 80/ha. Provided that a farm raised eligible animals or produced milk in the reference period, the premiums derived are added as so-called top-ups on the entitlements for arable and grassland (with the exception of set-aside). The level of the payment claims remains constant until 2009 (except the dynamic adaptation from the upgrading of milk of sugar premia -> static hybrid model). From 2010, a progressive adaptation of the levels of the payment claims (dynamic hybrid model) occurs up to the full harmonisation in 2013.
Figure 9.2. Adjustments of entitlements in the German SPS scheme
Source: Kleinhanss, vTI (2008).