The Economic Sustainability of Farms under Common Agricultural Policy in the European Union Countries

Marta Guth, Katarzyna Smędzik-Ambroży, Bazyli Czyżewski and Sebastian Stępień
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Marta Guth: Department of Macroeconomics and Agricultural Economics, Poznań University of Economics and Business, Al. Niepodległości 10, 61-875 Poznań, Poland
Katarzyna Smędzik-Ambroży: Department of Macroeconomics and Agricultural Economics, Poznań University of Economics and Business, Al. Niepodległości 10, 61-875 Poznań, Poland
Bazyli Czyżewski: Department of Macroeconomics and Agricultural Economics, Poznań University of Economics and Business, Al. Niepodległości 10, 61-875 Poznań, Poland
Sebastian Stępień: Department of Macroeconomics and Agricultural Economics, Poznań University of Economics and Business, Al. Niepodległości 10, 61-875 Poznań, Poland

Agriculture, 2020, vol. 10, issue 2, 1-20

Abstract: The aim of this paper is to determine the influence of the Common Agricultural Policy’s (CAP) subsidies on the level of economic sustainability of farms by means of three-fold study. To determine the economic sustainability of farms the authors applied the income gap ratio. Next, the level of income differentiation between farms of various economic classes was established. The last part consisted of the recognition of statistically significant CAP schemes that shape agricultural income in farms of different size and in assessing how the respective subsidies should increase or decrease to fill the recognized gap, based on the coefficients of panel regression. The spatial scope covered all EU countries in 2005–2015. Results show that due to the CAP’s support the average income of farms has approached the average non-agricultural income, but distribution of this support favored the largest farms, increasing disparities within the sector.

Keywords: economic sustainability; agriculture; policy; subsidies; CAP; EU; income gap (search for similar items in EconPapers)
JEL-codes: Q1 Q10 Q11 Q12 Q13 Q14 Q15 Q16 Q17 Q18 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (28)

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