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CAP Reform and Its Impact on Structural Change and Productivity Growth: A Cross Country Analysis

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Author Info

  • Andrius Kazukauskas

    ()
    (Department of Economics, Trinity College Dublin)

  • Carol Newman

    ()
    (Department of Economics, Trinity College Dublin)

  • Johannes Sauer

    (School of Social Sciences, University of Manchester)

Abstract

The decoupling of direct payments from production, introduced in the recent reform of the Common Agricultural Policy (CAP) is expected to make production decisions more market-oriented and farmers more productive. However, ex-post analyses of the productivity of farms have yet to uncover any evidence of a positive impact of the decoupling policy on farm productivity. Using Irish, Danish and Dutch farm level data, we identify whether the decoupling policy has contributed to productivity growth in agriculture and to what extent enterprise switching and specialisation are important productivity improving mechanisms. We find some evidence that the decoupling policy and related farm enterprise specialisation had significant positive effects on farm productivity.

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Bibliographic Info

Paper provided by Trinity College Dublin, Department of Economics in its series Trinity Economics Papers with number tep0411.

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Length: 23 pages
Date of creation: Feb 2011
Date of revision:
Handle: RePEc:tcd:tcduee:tep0411

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Keywords: productivity; subsidy decoupling; semi-parametric estimation; switching; specialisation;

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References

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  1. 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.
  2. Jan De Loecker, 2011. "Product Differentiation, Multiproduct Firms, and Estimating the Impact of Trade Liberalization on Productivity," Econometrica, Econometric Society, vol. 79(5), pages 1407-1451, 09.
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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Impact of CAP subsidies on productivity - by Alan Matthews
    by Alan Matthews in CAP Reform.eu on 2013-04-01 21:50:25
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Cited by:
  1. Jaraite, Jurate & Ka┼żukauskas, 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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