Impact assessment of agricultural and fiscal policy in Greece on business-oriented arable farms

Stamatis Mantziaris (sta.athens@hotmail.com) and Stelios Rozakis

No 2016-1, Working Papers from Agricultural University of Athens, Department Of Agricultural Economics

Abstract: This paper examines the impacts of the national implementation of the CAP reform 2014-20 and the fiscal policy derived from the Third Memorandum on the crop-mix decisions and the viability of business oriented Greek arable farming. A mathematical programming model is specified maximizing farmers' utility subject to agronomic, institutional and resource constraints. According to CAP reform scenario, reduction for cotton and durum wheat and on the other hand increase mainly for set aside and secondary for alfalfa cultivation areas is observed. Similar crop-mix is cultivated for the combined scenario of CAP and fiscal reform. Although gross margin decreases in both scenarios, almost all farms remain viable because 64% of their gross revenue is derived from the market. Consequently, farms are not sensitive enough in reform concerning reduction of subsidies but the combination with tax measures decrease the levels of viability significantly.

Keywords: Utility function; mathematical programming; policy analysis; arable farming; Thessaly (search for similar items in EconPapers)
JEL-codes: C61 Q12 Q18 (search for similar items in EconPapers)
Pages: 39
Date: 2016
New Economics Papers: this item is included in nep-agr, nep-pke and nep-upt
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