The income effect of CAP subsidies: implications of distributional leakages for transfer efficiency in Italy

Stefano Ciliberti and Angelo Frascarelli

Bio-based and Applied Economics Journal, 2018, vol. 07, issue 2

Abstract: Enhancing farm income level is one of the main purpose of the Common Agricultural Policy (CAP). The ability to reach such a goal can be measured in terms of transfer efficiency, that is affected by the presence of distributive leakages through the agro-food system. The present work aims to shed light on the income distributional effects of the main forms of CAP subsidies in Italy over the period 2008–2014: single payment scheme, coupled payment and second pillar aids. To this aim, an Arellano–Bond linear dynamic panel-data estimation (based on a database provided by the Italian FADN) is performed. Results show that all the main types of CAP support have a significant income effect, even though some relevant differences occur between decoupled and coupled components of direct payments received by Italian farmers as a consequence of distributional leakages.

Keywords: Community/Rural/Urban; Development (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aieabj:301890

DOI: 10.22004/ag.econ.301890

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