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The regional economic consequences of Less Favoured Area support: a spatial general equilibrium analysis of the Polish LFA program

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  • James Giesecke
  • Mark Horridge
  • Katarzyna Zawalinska

Abstract

On accession to the EU, Poland, one of the most agricultural countries in the region, became eligible for the Common Agricultural Policy (CAP), which it perceived as a chance to develop its rural economy. However, in constructing its 2007-2013 Rural Development Programme, Poland directed the largest funding share to Less Favoured Areas (LFA) -- a controversial measure accused of poor targeting and ineffectiveness. In this paper, we analyse the spatial economic consequences of LFA support for all 16 NUTS2 regions in Poland using a regional computable general equilibrium model called POLTERM. We show that LFA support did help to increase farmers' incomes, but harmed export-oriented sectors and hindered structural change in the Polish economy.

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Bibliographic Info

Paper provided by Victoria University, Centre of Policy Studies/IMPACT Centre in its series Centre of Policy Studies/IMPACT Centre Working Papers with number g-211.

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Date of creation: Nov 2010
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Publication status: Published in 'The consequences of LFA support: a multi-regional CGE analysis for Poland', Agricultural and Food Science, Vol. 22(2), 2013, pp. 272-287.
Handle: RePEc:cop:wpaper:g-211

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Related research

Keywords: Common Agricultural Policy Reform; Rural development; Less Favoured Areas; Spatial Computable General Equilibrium Model; Poland;

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  1. Dixon, Janine & Matthews, Alan, 2006. "Impact of the 2003 Mid-Term Review of the Common Agricultural Policy," Quarterly Economic Commentary: Special Articles, Economic and Social Research Institute (ESRI), Economic and Social Research Institute (ESRI), vol. 2006(1-Spring), pages 1-17.
  2. Joaquim Bento de Souza Ferreira Filho & Carliton Vieira dos Santos & Sandra Maria do Prado Lima, 2007. "Tax Reform, Income Distribution and Poverty in Brazil: an Applied General Equilibrium Analysis," Working Papers MPIA, PEP-MPIA 2007-26, PEP-MPIA.
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