CAP reform and its impact on structural change and productivity growth: A cross country analysis

Andrius Kazukauskas and Carol Newman

No 61103, 114th Seminar, April 15-16, 2010, Berlin, Germany from European Association of Agricultural Economists

Abstract: The recent reforms of the Common Agricultural Policy (CAP) have exposed the European agricultural sector to a new set of constraints and challenges. The decoupling of direct payments from production is expected to make production decisions more market-oriented as farmers move from mainly subsidy revenue maximization objectives toward profit maximizing behaviour. However, ex-post analyses of the productivity of farms have yet to uncover any evidence of a positive effect of the decoupling policy on farm productivity. Using the Irish, Danish and Dutch farm level data, we identify the extent to which both system and product switching after the introduction of decoupling has occurred and to what extent these changes have contributed to productivity growth in the agriculture. We find some evidence that the decoupling policy had positive significant effects on farm productivity but the product switching behaviour associated with the changes in farm decoupling rates have not led to productivity improvements.

Keywords: Agricultural and Food Policy; Farm Management; Land Economics/Use (search for similar items in EconPapers)
Pages: 22
Date: 2010-04
New Economics Papers: this item is included in nep-agr and nep-eff
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:eaa114:61103

DOI: 10.22004/ag.econ.61103

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