Impact of CAP direct payments on French farms’ managerial efficiency

Laure Latruffe, Herve Guyomard () and Chantal Le Mouël
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Herve Guyomard: Laboratoire de Microbiologie - INRA - Institut National de la Recherche Agronomique - UB - Université de Bourgogne - ENSBANA - Ecole Nationale Supérieure de Biologie Appliquée à la Nutrition et à l'Alimentation de Dijon

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Abstract: This paper investigates the relationship between CAP direct payments and managerial efficiency for French crop and beef farms. Managerial efficiency scores are calculated using a four-step approach that allows disentangling managerial inefficiency from other technical inefficiency components, notably what is due to unfavourable environment conditions. Then managerial efficiency scores are regressed over a set of explanatory variables, including CAP direct payments. Our empirical application, based on individual farm data and meteorological data at the municipality level for the year 2000, shows that there is a substantial component of inefficiency that is due to unfavourable conditions. Moreover, there is a significant negative relationship between managerial efficiency and CAP direct payments for crop farms, but a positive relationship for livestock farms. The type of payments also matter, with area-based and Less Favoured Area payments reducing crop farms' efficiency but headage and agri-environmental payments increasing beef farms' efficiency.

Keywords: TECHNICAL EFFICIENCY; MANAGERIAL EFFICIENCY; CROP FARM; BEEF FARM; SUBSIDIES (search for similar items in EconPapers)
Date: 2008-08-26
Note: View the original document on HAL open archive server: https://hal.inrae.fr/hal-02818109v1
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Citations: View citations in EconPapers (2)

Published in 12. EAAE Congress, European Association of Agricultural Economists (EAAE). INT., Aug 2008, Ghent, Belgium. 8 p

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Related works:
Working Paper: Impact of CAP Direct Payments on French Farms’ Managerial Efficiency (2008)
Working Paper: Impact of CAP direct payments on French farms’ managerial efficiency (2007)
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