THE CHANGES TO RURALITY IN EUROPEAN FARMS AND THE ROLE OF CAP SUBSIDIES IN EU ENLARGEMENT

Nicola Galluzzo ()
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Nicola Galluzzo: Association of Geographical and Economic Studies of Rural Areas, Rieti, Italy

Agricultural Economics and Rural Development, 2020, vol. 17, issue 1, 57-68

Abstract: The Farm Accountancy Data Network (FADN) is an important tool for assessing the impact of the Common Agricultural Policy on EU farming. The core aim of this research was to assess through a quantitative approach the impact that a number of variables and the financial subsides allocated under the Common Agricultural Policy have had on the rurality in European countries, using data for farms included in the FADN dataset during the years 2004 and 2017. The research followed a non- parametric approach, using the Partial Least Square Structural Equation Modeling (PLS-SEM) and Principal Component Analysis (PCA). These methodologies have been applied with a view to defining the main correlations in all variables linked to the rurality, namely crop specialisation, farmer’s net income, management costs, and costs of production. The findings have revealed that the financial subsidies allocated under the Common Agricultural Policy correlated to crop and livestock specialisation have influenced the rurality index over the period of investigation. Drawing conclusions, payments and decoupled subsidies disbursed by the European Union have acted directly on the level of rurality in all investigated farms included in the FADN dataset during the period of investigation. This implies that the Common Agricultural Policy decoupled payments and the subsidies provided to disadvantaged rural areas have had a prominent role in the rurality index of all farms included in the Farm Accountancy Data Network dataset.

Keywords: PLS-SEM; PCA; Less Favoured Areas subsidies; rural areas; Common Agricultural Policy (search for similar items in EconPapers)
JEL-codes: Q10 R11 (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:iag:reviea:v:17:y:2020:i:1:p:57-68

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