CAP reform and its impact on structural change and productivity growth: A cross country analysis
AbstractThe 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.
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Bibliographic InfoPaper provided by European Association of Agricultural Economists in its series 114th Seminar, April 15-16, 2010, Berlin, Germany with number 61103.
Date of creation: Apr 2010
Date of revision:
productivity; semiparametric estimation; farming; decoupling; Agricultural and Food Policy; Farm Management; Land Economics/Use; D24; Q12; Q18;
Other versions of this item:
- Andrius Kazukauskas & Carol Newman & Johannes Sauer, 2011. "CAP Reform and Its Impact on Structural Change and Productivity Growth: A Cross Country Analysis," Trinity Economics Papers tep0411, Trinity College Dublin, Department of Economics.
- D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
- Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
- Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy
This paper has been announced in the following NEP Reports:
- NEP-AGR-2010-05-22 (Agricultural Economics)
- NEP-ALL-2010-05-22 (All new papers)
- NEP-EFF-2010-05-22 (Efficiency & Productivity)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Jan De Loecker, 2011.
"Product Differentiation, Multiproduct Firms, and Estimating the Impact of Trade Liberalization on Productivity,"
Econometric Society, vol. 79(5), pages 1407-1451, 09.
- Jan De Loecker, 2007. "Product Differentiation, Multi-product Firms and Estimating the Impact of Trade Liberalization on Productivity," NBER Working Papers 13155, National Bureau of Economic Research, Inc.
- Nigel Key & Ruben N. Lubowski & Michael J. Roberts, 2005. "Farm-Level Production Effects from Participation in Government Commodity Programs: Did the 1996 Federal Agricultural Improvement and Reform Act Make a Difference?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(5), pages 1211-1219.
Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- Impact of CAP subsidies on productivity - by Alan Matthews
by Alan Matthews in CAP Reform.eu on 2013-04-01 21:50:25
- Jaraite, Jurate & Kažukauskas, Andrius, 2011. "The effect of mandatory agro-environmental policy on farm environmental performance," CERE Working Papers 2011:13, CERE - the Center for Environmental and Resource Economics.
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