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Regional Income Effects of Producer Support under the CAP


Author Info

  • Sven Anders

    (Institute of Agricultural Policy and Market Research, University of Giessen)

  • Johannes Harsche

    (Forschungs- und Entwicklungsgesellschaft Hessen)

  • Roland Herrmann

    (Institute of Agricultural Policy and Market Research, University of Giessen)

  • Klaus Salhofer

    (Environmental Economics and Agricultural Policy Group, Technical University of Munich)


The Common Agricultural Policy (CAP) of the European Union (EU) is characterized by a wide array of individual policy measures, which differ by the category of instruments, across commodities and over time. Consequently, the net impact of the policy mix on price incentives for producers and consumers had been intransparent for years. This study utilizes a regionalized concept of producer support estimates (PSEs) to elaborate the primary effects of the CAP on producers at a disaggregate level of NUTS III regions. 26 regions in the federal state of Hesse, Germany, in the years 1986-1999 are utilized as a case study. One important result is that a uniform CAP does affect the regions very differently. Recent reforms of the CAP have not reduced significantly the average level of agricultural support in the region studied. Statistically significant downward trends in absolute producer support due to price support were associated with significant upward trends due to direct payments. Interestingly, absolute and relative PSE measures due to the CAP and price support are fully uncorrelated with each other. If transfers under the CAP are targeted in terms of absolute support, e.g., this may induce an arbitrary interregional distribution of PSEs in relation to farm revenues.

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Bibliographic Info

Paper provided by Technische Universität München, Environmental Economics and Agricultural Policy Group in its series Discussion Papers with number 012004.

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Length: 21 pages
Date of creation: Jan 2004
Date of revision:
Publication status: Published in Cahiers d'Economie et Sociologie Rurales. No. 73, 103-121. (revised version)
Handle: RePEc:tuu:papers:012004

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Keywords: common agriculture policy; European Union; producer support estimates (PSE); regional income effects; Hesse;


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Cited by:
  1. Olper, Alessandro & Raimondi, Valentina & Cavicchioli, Daniele & Vigani, Mauro, . "Reallocation of Agricultural Labor and Farm Subsidies: Evidence From the EU Regions," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126645, International Association of Agricultural Economists.
  2. Olper, Alessandro & Raimondi, Valentina & Cavicchioli, Daniele & Vigani, Mauro, 2013. "Does Common Agricultural Policy Reduce Farm Labor Migration? A Panel Data Analysis Across EU Regions," Proceedings Issues, 2013: Productivity and Its Impacts on Global Trade, June 2-4, 2013. Seville, Spain 152326, International Agricultural Trade Research Consortium.
  3. Harsche, Johannes, 2006. "Räumlich Differenzierte Stabilisierungswirkungen Der Europäischen Agrarpolitik In Unterschiedlich Konditionierten Erzeugerregionen In Hessen," 46th Annual Conference, Giessen, Germany, October 4-6, 2006 14949, German Association of Agricultural Economists (GEWISOLA).
  4. Elsholz, Rudiger & Harsche, Johannes, 2008. "Common Agricultural Policy Impacts on Farm Revenues," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 44409, European Association of Agricultural Economists.
  5. Roberto Esposti, 2008. "Regional growth convergence and EU policies: Empirical evidence and measuring problems," CESifo Forum, Ifo Institute for Economic Research at the University of Munich, vol. 9(1), pages 14-22, 04.
  6. Hansen, Heiko, 2005. "Effects of Agricultural Policy Measures on Gross Transfers to Farmers: Intertemporal and Interregional Evidence from the CAP," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24625, European Association of Agricultural Economists.
  7. Elsholz, Rudiger & Harsche, Johannes, 2011. "Price Changes, Policy Impacts and Instability in Farmers’ Revenues," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114342, European Association of Agricultural Economists.
  8. Harsche, Johannes, 2007. "DIE BEDEUTUNG DER LANDWIRTSCHAFT AUF DEM ARBEITSMARKT IM KONTEXT WIRTSCHAFTSRAUMLICHER DISPARITATEN-ERGEBNISSE EINER PANEL-ANALYSE (German)," 47th Annual Conference, Weihenstephan, Germany, September 26-28, 2007 7593, German Association of Agricultural Economists (GEWISOLA).
  9. Siudek, Tomasz & Zawojska, Aldona, 2011. "Relationship of Development and Fiscal Indicators with Agricultural Producer Support in the OECD Economies," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 116009, European Association of Agricultural Economists.
  10. Sven Anders & Johannes Harsche & Roland Herrmann & Klaus Salhofer & Ramona Teuber, 2007. "The Interregional and Intertemporal Allocation of EU Producer Support: Magnitude and Determinants," Jahrbuch für Regionalwissenschaft, Springer, vol. 27(2), pages 171-193, August.
  11. Olper, Alessandro & Raimondi, Valentina & Cavicchioli, Daniele & Vigani, Mauro, 2012. "Does the Common Agricultural Policy Reduce Farm Labour Migration? Panel data analysis across EU regions," Working Papers 128790, Factor Markets, Centre for European Policy Studies.


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