IDEAS home Printed from https://ideas.repec.org/a/gam/jagris/v10y2020i2p34-d314937.html
   My bibliography  Save this article

The Economic Sustainability of Farms under Common Agricultural Policy in the European Union Countries

Author

Listed:
  • Marta Guth

    (Department of Macroeconomics and Agricultural Economics, Poznań University of Economics and Business, Al. Niepodległości 10, 61-875 Poznań, Poland)

  • Katarzyna Smędzik-Ambroży

    (Department of Macroeconomics and Agricultural Economics, Poznań University of Economics and Business, Al. Niepodległości 10, 61-875 Poznań, Poland)

  • Bazyli Czyżewski

    (Department of Macroeconomics and Agricultural Economics, Poznań University of Economics and Business, Al. Niepodległości 10, 61-875 Poznań, Poland)

  • Sebastian Stępień

    (Department of Macroeconomics and Agricultural Economics, Poznań University of Economics and Business, Al. Niepodległości 10, 61-875 Poznań, Poland)

Abstract

The aim of this paper is to determine the influence of the Common Agricultural Policy’s (CAP) subsidies on the level of economic sustainability of farms by means of three-fold study. To determine the economic sustainability of farms the authors applied the income gap ratio. Next, the level of income differentiation between farms of various economic classes was established. The last part consisted of the recognition of statistically significant CAP schemes that shape agricultural income in farms of different size and in assessing how the respective subsidies should increase or decrease to fill the recognized gap, based on the coefficients of panel regression. The spatial scope covered all EU countries in 2005–2015. Results show that due to the CAP’s support the average income of farms has approached the average non-agricultural income, but distribution of this support favored the largest farms, increasing disparities within the sector.

Suggested Citation

  • Marta Guth & Katarzyna Smędzik-Ambroży & Bazyli Czyżewski & Sebastian Stępień, 2020. "The Economic Sustainability of Farms under Common Agricultural Policy in the European Union Countries," Agriculture, MDPI, vol. 10(2), pages 1-20, January.
    • Handle: RePEc:gam:jagris:v:10:y:2020:i:2:p:34-:d:314937
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2077-0472/10/2/34/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2077-0472/10/2/34/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Velazquez, Beatriz E., 2008. "The Single Payment Scheme In The Impact Assessment Of The Cap "Heath Check"," 109th Seminar, November 20-21, 2008, Viterbo, Italy 44784, European Association of Agricultural Economists.
    2. Chatzinikolaou, Parthena & Manos, Basil D. & Bournaris, Thomas, 2012. "Classification of rural areas in Europe using social sustainability indicators," 2012 First Congress, June 4-5, 2012, Trento, Italy 124104, Italian Association of Agricultural and Applied Economics (AIEAA).
    3. Bachev, H., 2017. "Socio-economic and environmental sustainability of Bulgarian farms," Agricultural and Resource Economics: International Scientific E-Journal, Agricultural and Resource Economics: International Scientific E-Journal, vol. 3(2), June.
    4. Bazyli Czyżewski & Andrzej Czyżewski & Łukasz Kryszak, 2019. "The Market Treadmill Against Sustainable Income of European Farmers: How the CAP Has Struggled with Cochrane’s Curse," Sustainability, MDPI, vol. 11(3), pages 1-16, February.
    5. Wigier, Marek (ed.) & Kowalski, Andrzej (ed.), 2018. "The Common Agricultural Policy of the European Union - the present and the future. Non-EU Member States point of view," Multiannual Program Reports 302753, Institute of Agricultural and Food Economics - National Research Institute (IAFE-NRI).
    6. Wigier, Marek (ed.) & Kowalski, Andrzej (ed.), 2018. "The Common Agricultural Policy of the European Union – the present and the future. EU Member States point of view," Multiannual Program Reports 302752, Institute of Agricultural and Food Economics - National Research Institute (IAFE-NRI).
    7. Heidhues, Franz & Obare, Gideon A., 2011. "Lessons from Structural Adjustment Programmes and their Effects in Africa," Quarterly Journal of International Agriculture, Humboldt-Universitaat zu Berlin, vol. 50(1), pages 1-10, February.
    8. Timothy A. Wise, "undated". "The Paradox of Agricultural Subsidies: Measurement Issues, Agricultural Dumping, and Policy Reform," GDAE Working Papers 04-02, GDAE, Tufts University.
    9. Marian Rizov & Jan Pokrivcak & Pavel Ciaian, 2013. "CAP Subsidies and Productivity of the EU Farms," Journal of Agricultural Economics, Wiley Blackwell, vol. 64(3), pages 537-557, September.
    10. Czyżewski, Bazyli & Kłodowska, Małgorzata & Matuszczak, Anna & Matuszewska, Adrianna & Śmidoda, Dariusz, 2018. "Social Sustainab ility in Agricultural Farms with Selected Types of Production in European Union countries," Roczniki (Annals), Polish Association of Agricultural Economists and Agribusiness - Stowarzyszenie Ekonomistow Rolnictwa e Agrobiznesu (SERiA), vol. 2018(4).
    11. Michael Gizicki-Neundlinger & And Dino Güldner, 2017. "Surplus, Scarcity and Soil Fertility in Pre-Industrial Austrian Agriculture—The Sustainability Costs of Inequality," Sustainability, MDPI, vol. 9(2), pages 1-18, February.
    12. Laure Latruffe, 2010. "Competitiveness, Productivity and Efficiency in the Agricultural and Agri-Food Sectors," OECD Food, Agriculture and Fisheries Papers 30, OECD Publishing.
    13. Ciaian, Pavel & Swinnen, Johan F.M., 2009. "AJAE appendix for ‘Credit Market Imperfections and the Distribution of Policy Rents’," American Journal of Agricultural Economics APPENDICES, Agricultural and Applied Economics Association, vol. 91(4), pages 1-10, February.
    14. Pavel Ciaian & Johan F.M. Swinnen, 2009. "Credit Market Imperfections and the Distribution of Policy Rents," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(4), pages 1124-1139.
    15. Włodzimierz Rembisz, 2010. "The Critical Analysis of the Intervention Basis and Evolution in Agriculture," Contemporary Economics, University of Economics and Human Sciences in Warsaw., vol. 4(4), December.
    16. Wolz, Axel & Fritzsch, Jana & Reinsberg, Klaus, 2005. "The Impact of Social Capital on Farm and Household Income: Results of a Survey among Individual Farmers in Poland," 94th Seminar, April 9-10, 2005, Ashford, UK 24442, European Association of Agricultural Economists.
    17. World Commission on Environment and Development,, 1987. "Our Common Future," OUP Catalogue, Oxford University Press, number 9780192820808.
    18. Latruffe, Laure & Diazabakana, Ambre & Bockstaller, Christian & Desjeux, Yann & Finn, John & Kelly, Edel & Ryan, Mary & Uthes, Sandra, 2016. "Measurement of sustainability in agriculture: a review of indicators," Studies in Agricultural Economics, Research Institute for Agricultural Economics, vol. 118(3), pages 1-8, December.
    19. Wenbiao Cai & Manish Pandey, 2015. "The Agricultural Productivity Gap In Europe," Economic Inquiry, Western Economic Association International, vol. 53(4), pages 1807-1817, October.
    20. Amanda Berlan, 2013. "Social Sustainability in Agriculture: An Anthropological Perspective on Child Labour in Cocoa Production in Ghana," Journal of Development Studies, Taylor & Francis Journals, vol. 49(8), pages 1088-1100, August.
    21. Pierre Boulanger & Patrick Messerlin, 2010. "2020 European Agriculture: Challenges and Policies," Post-Print hal-03393485, HAL.
    22. Alan Greer, 2013. "The Common Agricultural Policy and the EU budget: stasis or change?," European Journal of Government and Economics, Europa Grande, vol. 2(2), pages 119-136, December.
    23. Bock, Bettina B., 2012. "Social innovation and sustainability; how to disentangle the buzzword and its application in the field of agriculture and rural development," Studies in Agricultural Economics, Research Institute for Agricultural Economics, vol. 114(2), pages 1-7, October.
    24. Czyżewski, Bazyli & Poczta-Wajda, Agnieszka, 2016. "Effects of Policy and Market on Relative Income Deprivation of Agricultural Labour," 160th Seminar, December 1-2, 2016, Warsaw, Poland 249759, European Association of Agricultural Economists.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sebastian Stępień & Jan Polcyn & Michał Borychowski, 2021. "Determinanty zrównoważonego rozwoju ekonomiczno-społecznego rodzinnych gospodarstw rolnych w Polsce," Ekonomista, Polskie Towarzystwo Ekonomiczne, vol. 1, pages 56-86, January.
    2. Sebastian Stępień & Jan Polcyn & Michał Borychowski, 2021. "Determinanty zrównoważonego rozwoju ekonomiczno-społecznego rodzinnych gospodarstw rolnych w Polsce," Ekonomista, Polskie Towarzystwo Ekonomiczne, issue 1, pages 56-86.
    3. Michał Borychowski & Sebastian Stępień & Jan Polcyn & Aleksandra Tošović-Stevanović & Dragan Ćalović & Goran Lalić & Milena Žuža, 2020. "Socio-Economic Determinants of Small Family Farms’ Resilience in Selected Central and Eastern European Countries," Sustainability, MDPI, vol. 12(24), pages 1-30, December.
    4. Frýd, Lukáš & Sokol, Ondřej, 2021. "Relationships between technical efficiency and subsidies for Czech farms: A two-stage robust approach," Socio-Economic Planning Sciences, Elsevier, vol. 78(C).
    5. Bazyli Czyżewski & Marta Guth, 2021. "Impact of Policy and Factor Intensity on Sustainable Value of European Agriculture: Exploring Trade-Offs of Environmental, Economic and Social Efficiency at the Regional Level," Agriculture, MDPI, vol. 11(1), pages 1-19, January.
    6. Czyżewski, Bazyli & Poczta-Wajda, Agnieszka, 2016. "Effects of Policy and Market on Relative Income Deprivation of Agricultural Labour," 160th Seminar, December 1-2, 2016, Warsaw, Poland 249759, European Association of Agricultural Economists.
    7. Ondřej Dvouletý & Ivana Blažková, 2019. "The Impact of Public Grants on Firm-Level Productivity: Findings from the Czech Food Industry," Sustainability, MDPI, vol. 11(2), pages 1-24, January.
    8. Katarzyna Smędzik-Ambroży & Marta Guth & Sebastian Stępień & Agnieszka Brelik, 2019. "The Influence of the European Union’s Common Agricultural Policy on the Socio-Economic Sustainability of Farms (the Case of Poland)," Sustainability, MDPI, vol. 11(24), pages 1-15, December.
    9. Bazyli Czyżewski & Andrzej Czyżewski & Łukasz Kryszak, 2019. "The Market Treadmill Against Sustainable Income of European Farmers: How the CAP Has Struggled with Cochrane’s Curse," Sustainability, MDPI, vol. 11(3), pages 1-16, February.
    10. Czyżewski, Bazyli & Poczta-Wajda, Agnieszka, 2017. "Wpływ polityki i rynku na relatywną deprywację dochodową czynnika pracy w rolnictwie," Village and Agriculture (Wieś i Rolnictwo), Polish Academy of Sciences (IRWiR PAN), Institute of Rural and Agricultural Development, vol. 3(176).
    11. Ioannis Skevas & Grigorios Emvalomatis & Bernhard Brümmer, 2018. "The effect of farm characteristics on the persistence of technical inefficiency: a case study in German dairy farming," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 45(1), pages 3-25.
    12. Garrone, Maria & Emmers, Dorien & Olper, Alessandro & Swinnen, Johan, 2019. "Jobs and agricultural policy: Impact of the common agricultural policy on EU agricultural employment," Food Policy, Elsevier, vol. 87(C), pages 1-1.
    13. Jitea, Ionel-Mugurel & Pocol, Cristina Bianca, 2014. "The Common Agricultural Policy and productivity gains in Romanian agriculture: is there any evidence of convergence to the Western European realities?," Studies in Agricultural Economics, Research Institute for Agricultural Economics, vol. 116(3), pages 1-3, December.
    14. Minviel, Jean Joseph & De Witte, Kristof, 2017. "The influence of public subsidies on farm technical efficiency: A robust conditional nonparametric approach," European Journal of Operational Research, Elsevier, vol. 259(3), pages 1112-1120.
    15. Marie-Noelle Duquenne & Maria Tsiapa & Valantis Tsiakos, 2019. "Contribution of the Common Agricultural Policy to agricultural productivity of EU regions during 2004–2012 period," Review of Agricultural, Food and Environmental Studies, Springer, vol. 100(1), pages 47-68, December.
    16. Mohamed Ghali & Laure Latruffe & Karine Daniel, 2016. "Efficient Use of Energy Resources on French Farms: An Analysis through Technical Efficiency," Energies, MDPI, vol. 9(8), pages 1-15, July.
    17. Stępień Sebastian & Czyżewski Andrzej, 2019. "Quo vadis Common Agricultural Policy of the European Union?," Management, Sciendo, vol. 23(2), pages 295-309, December.
    18. Marian Rizov & Jan Pokrivcak & Pavel Ciaian, 2013. "CAP Subsidies and Productivity of the EU Farms," Journal of Agricultural Economics, Wiley Blackwell, vol. 64(3), pages 537-557, September.
    19. Qifeng Yang & Pingyu Zhang & Yuxin Li & Jiachen Ning & Nanchen Chu, 2023. "Does the Policy of Decoupled Subsidies Improve the Agricultural Economic Resilience?—Evidence from China’s Main Corn Producing Regions," Sustainability, MDPI, vol. 15(13), pages 1-23, June.
    20. Pavel Ciaian & Edoardo Baldoni & d'Artis Kancs & Dušan Drabik, 2021. "The Capitalization of Agricultural Subsidies into Land Prices," Annual Review of Resource Economics, Annual Reviews, vol. 13(1), pages 17-38, October.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jagris:v:10:y:2020:i:2:p:34-:d:314937. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.