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Can the CAP payments facilitate the growth of individual farms in the New Member States post-EU accession?

Laure Latruffe (), Sophia Davidova (), Elodie Douarin () and Matthew Gorton ()

No 43611, 2008 International Congress, August 26-29, 2008, Ghent, Belgium from European Association of Agricultural Economists

Abstract: The impact of the introduction of EU Single Area Payments (SAP) on farm strategy in New Member States is investigated for a sample of Lithuanian farms, utilizing farm accounting and survey data. The application of two investment models demonstrates that the credit market in Lithuania was imperfect prior to accession and that some farms were financially constrained. The introduction of the SAP has a significant, positive influence on farmers’ intentions to expand their farm area compared to a baseline scenario of the continuation of pre-accession policy. The switch in policy has a more pronounced effect on farms that were previously credit constrained. While the SAP has been presented as a policy support that is decoupled from production, its introduction will nevertheless have ex post coupled effects, most notably an income multiplier effect on credit constrained farmers.

Keywords: Agricultural and Food Policy; Farm Management (search for similar items in EconPapers)
Pages: 8
Date: 2008
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Persistent link: https://EconPapers.repec.org/RePEc:ags:eaae08:43611

DOI: 10.22004/ag.econ.43611

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