IDEAS home Printed from https://ideas.repec.org/a/ags/frrfes/308880.html
   My bibliography  Save this article

Contribution of the Common Agricultural Policy to agricultural productivity of EU regions during 2004–2012 period

Author

Listed:
  • Duquenne, Marie-Noelle
  • Tsiapa, Maria
  • Tsiakos, Valantis

Abstract

The aim of this paper is to investigate the influence of Common Agricultural Policy(CAP) subsidies on agricultural (labour and total factor) productivity growth of EUregions during the period 2004–2012. The objective is to assess the impact of thispolicy on agricultural growth and competitiveness of regions, first in the aftermath ofthe fundamental reforms of the decoupling policy and second during the historiceastward enlargement of the EU, which deepened asymmetric spatial patterns andmay have led to the CAP having a different spatial impact. The analysis uses aneconometric approach based on an augmented Cobb-Douglas production function.The impact is proved to be mixed; positive when thechangeof subsidies with a 1-year lag is considered, which is related to farm strategies, and negative when thelevelof subsidies, which is based on reference data, is considered. In the case of the newmember states, the effect is negative, confirming the CAP’s incompatibility with theagricultural structures of the area.

Suggested Citation

  • Duquenne, Marie-Noelle & Tsiapa, Maria & Tsiakos, Valantis, 2019. "Contribution of the Common Agricultural Policy to agricultural productivity of EU regions during 2004–2012 period," Review of Agricultural, Food and Environmental Studies, Institut National de la Recherche Agronomique (INRA), vol. 100(1-4), October.
  • Handle: RePEc:ags:frrfes:308880
    DOI: 10.22004/ag.econ.308880
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/308880/files/Duquenne2019_Article_ContributionOfTheCommonAgricul.pdf
    Download Restriction: no

    File URL: https://libkey.io/10.22004/ag.econ.308880?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Guan Zhengfei & Alfons Oude Lansink, 2006. "The Source of Productivity Growth in Dutch Agriculture: A Perspective from Finance," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(3), pages 644-656.
    2. Happe, Kathrin & Balmann, Alfons & Kellermann, Konrad & Sahrbacher, Christoph, 2008. "Does structure matter? The impact of switching the agricultural policy regime on farm structures," Journal of Economic Behavior & Organization, Elsevier, vol. 67(2), pages 431-444, August.
    3. David A. Hennessy, 1998. "The Production Effects of Agricultural Income Support Policies under Uncertainty," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(1), pages 46-57.
    4. Kazukauskas, Andrius & Newman, Carol F., 2010. "CAP reform and its impact on structural change and productivity growth: A cross country analysis," 114th Seminar, April 15-16, 2010, Berlin, Germany 61103, European Association of Agricultural Economists.
    5. V. Ball & Jean-Christophe Bureau & Jean-Pierre Butault & Richard Nehring, 2001. "Levels of Farm Sector Productivity: An International Comparison," Journal of Productivity Analysis, Springer, vol. 15(1), pages 5-29, January.
    6. Petrick, Martin & Kloss, Mathias, 2012. "Drivers of agricultural capital productivity in selected EU member states," Factor Markets Working Papers 137, Centre for European Policy Studies.
    7. ,, 2009. "Economics of Monetary Union," OUP Catalogue, Oxford University Press, edition 8, number 9780199563234, December.
    8. Areti Gkypali & Kostas Kounetas & Kostas Tsekouras, 2019. "European countries’ competitiveness and productive performance evolution: unraveling the complexity in a heterogeneity context," Journal of Evolutionary Economics, Springer, vol. 29(2), pages 665-695, April.
    9. Niebuhr, Annekatrin, 2000. "Convergence and the effects of spatial interaction," HWWA Discussion Papers 110, Hamburg Institute of International Economics (HWWA).
    10. Arellano, Manuel & Bover, Olympia, 1995. "Another look at the instrumental variable estimation of error-components models," Journal of Econometrics, Elsevier, vol. 68(1), pages 29-51, July.
    11. Aiello, Francesco & Scoppa, Vincenzo, 2008. "Convergence and Regional Productivity Divide in Italy: Evidence from Panel Data," MPRA Paper 17343, University Library of Munich, Germany.
    12. Vincenzo Scoppa, 2007. "Quality of Human and Physical Capital and Technological Gaps across Italian Regions," Regional Studies, Taylor & Francis Journals, vol. 41(5), pages 585-599.
    13. Sauer, Johannes & Park, Tim, 2009. "Organic farming in Scandinavia -- Productivity and market exit," Ecological Economics, Elsevier, vol. 68(8-9), pages 2243-2254, June.
    14. Costas Siriopoulos & Dimitrios Asteriou, 1998. "Testing for Convergence Across the Greek Regions," Regional Studies, Taylor & Francis Journals, vol. 32(6), pages 537-546, August.
    15. repec:zbw:iamodp:274820 is not listed on IDEAS
    16. Kazukauskas, Andrius & Newman, Carol F. & Thorne, Fiona S., 2010. "Analysing the Effect of Decoupling on Agricultural Production: Evidence from Irish Dairy Farms using the Olley and Pakes Approach," Journal of International Agricultural Trade and Development, Journal of International Agricultural Trade and Development, vol. 59(3).
    17. Pavel Ciaian & Jan Fałkowski & D’Artis Kancs, 2012. "Productivity and credit constraints: A firm-level propensity score evidence for agricultural farms in central and east European countries," Acta Oeconomica, Akadémiai Kiadó, Hungary, vol. 62(4), pages 459-487, 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. Gershon Feder & Lawrence J. Lau & Justin Y. Lin & Xiaopeng Luo, 1990. "The Relationship between Credit and Productivity in Chinese Agriculture: A Microeconomic Model of Disequilibrium," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 72(5), pages 1151-1157.
    20. Belen Iraizoz & Isabel Bardaji & Manuel Rapun, 2005. "The Spanish beef sector in the 1990s: impact of the BSE crisis on efficiency and profitability," Applied Economics, Taylor & Francis Journals, vol. 37(4), pages 473-484.
    21. Latruffe, Laure & Bravo-Ureta, Boris E. & Moreira, Victor H. & Desjeux, Yann & Dupraz, Pierre, 2011. "Productivity and Subsidies in European Union Countries: An Analysis for Dairy Farms Using Input Distance Frontiers," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114396, European Association of Agricultural Economists.
    22. Alan Matthews & Carol Newman & Fiona Thorne, 2006. "Productivity in Irish Agriculture," Working Papers 0614, Rural Economy and Development Programme,Teagasc.
    23. 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.
    24. N. Gregory Mankiw & David Romer & David N. Weil, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(2), pages 407-437.
    25. 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.
    26. Ronald Moomaw & J. Mullen & Martin Williams, 2002. "Human and knowledge capital: A contribution to the empirics of state economic growth," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 30(1), pages 48-60, March.
    27. Xueqin Zhu & Alfons Oude Lansink, 2010. "Impact of CAP Subsidies on Technical Efficiency of Crop Farms in Germany, the Netherlands and Sweden," Journal of Agricultural Economics, Wiley Blackwell, vol. 61(3), pages 545-564, September.
    28. Antonio Ciccone & Federico Cingano & Piero Cipollone, 2004. "The Private and Social Return to Schooling in Italy," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 63(3-4), pages 413-444, December.
    29. Chad Syverson, 2011. "What Determines Productivity?," Journal of Economic Literature, American Economic Association, vol. 49(2), pages 326-365, June.
    30. Reinhold Kosfeld & Hans-Friedrich Eckey & Christian Dreger, 2006. "Regional productivity and income convergence in the unified Germany, 1992-2000," Regional Studies, Taylor & Francis Journals, vol. 40(7), pages 755-767.
    31. Kloss, Mathias & Petrick, Martin, 2014. "The productivity of family and hired labour in EU arable farming," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 183041, European Association of Agricultural Economists.
    32. Lakner, Sebastian, 2009. "Technical efficiency of organic milk-farms in Germany - the role of subsidies and of regional factors," 2009 Conference, August 16-22, 2009, Beijing, China 51301, International Association of Agricultural Economists.
    33. Kazukauskas, Andrius & Newman, Carol F. & Thorne, Fiona S., 2010. "Analysing the Effect of Decoupling on Agricultural Production: Evidence from Irish Dairy Farms using the Olley and Pakes Approach," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 59(03), pages 1-14, September.
    34. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 277-297.
    35. Carter, Michael R., 1989. "The impact of credit on peasant productivity and differentiation in Nicaragua," Journal of Development Economics, Elsevier, vol. 31(1), pages 13-36, July.
    36. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    37. Ciliberti, Stefano & Frascarelli, Angelo, 2015. "A critical assessment of the implementation of CAP 2014- 2020 direct payments in Italy," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), vol. 4(3), pages 1-17, December.
    38. Oecd, 2006. "Decoupling: A Conceptual Overview," OECD Papers, OECD Publishing, vol. 5(11), pages 1-31.
    39. Ciaian, Pavel & Swinnen, Johan F.M., 2006. "AJAE Appendix: Land Market Imperfections and Agricultural Policy Impacts in the New EU Member States: A Partial Equilibrium Analysis," American Journal of Agricultural Economics APPENDICES, Agricultural and Applied Economics Association, vol. 88(4), pages 1-10, November.
    40. Bronzini, Raffaello & Piselli, Paolo, 2009. "Determinants of long-run regional productivity with geographical spillovers: The role of R&D, human capital and public infrastructure," Regional Science and Urban Economics, Elsevier, vol. 39(2), pages 187-199, March.
    41. repec:lic:licosd:40918 is not listed on IDEAS
    42. Arovuori, Kyösti & Yrjölä, Tapani, 2015. "The impact of the CAP and its reforms on the productivity growth in agriculture," 147th Seminar, October 7-8, 2015, Sofia, Bulgaria 212241, European Association of Agricultural Economists.
    43. Giannis Karagiannis & Alexander Sarris, 2005. "Measuring and explaining scale efficiency with the parametric approach: the case of Greek tobacco growers," Agricultural Economics, International Association of Agricultural Economists, vol. 33(s3), pages 441-451, November.
    44. Nivievskyi, Oleg, 2009. "Price Support, Efficiency and Technology Change of Ukrainian dairy farms: Spatial dependence in the components of productivity growth," 2009 Conference, August 16-22, 2009, Beijing, China 51403, International Association of Agricultural Economists.
    45. Bairam, Erkin I. & McRae, Shaun D., 1999. "Testing the convergence hypothesis: a new approach," Economics Letters, Elsevier, vol. 64(3), pages 351-355, September.
    46. Matthew Gorton & Carmen Hubbard & Lionel Hubbard, 2009. "The Folly of European Union Policy Transfer: Why the Common Agricultural Policy (CAP) Does Not Fit Central and Eastern Europe," Regional Studies, Taylor & Francis Journals, vol. 43(10), pages 1305-1317, December.
    47. Ciaian, Pavel & Fa?kowski, Jan & d’Artis, Kanc & Pokrivcak, Jan, 2011. "Productivity and Credit Constraints: Firm-Level Evidence from Propensity Score Matching," Factor Markets Working Papers 99, Centre for European Policy Studies.
    48. Camelia Burja, 2012. "Determinants Of The Agricultural Productivity Growth Among Romanian Regions," Annales Universitatis Apulensis Series Oeconomica, Faculty of Sciences, "1 Decembrie 1918" University, Alba Iulia, vol. 1(14), pages 1-18.
    49. Lajos Zoltan Bakucs & Laure Latruffe & Imre Fertő & Jozsef Fogarasi, 2010. "The impact of EU accession on farms' technical efficiency in Hungary," Post-Communist Economies, Taylor & Francis Journals, vol. 22(2), pages 165-175.
    50. Dimitris Skuras & Kostas Tsekouras & Efthalia Dimara & Dimitris Tzelepis, 2006. "The Effects of Regional Capital Subsidies on Productivity Growth: A Case Study of the Greek Food and Beverage Manufacturing Industry," Journal of Regional Science, Wiley Blackwell, vol. 46(2), pages 355-381, May.
    51. Dudu, Hasan & Smeets Kristkova, Zuzana, 2017. "Impact of CAP Pillar II Payments on Agricultural Productivity," 2017 International Congress, August 28-September 1, 2017, Parma, Italy 261171, European Association of Agricultural Economists.
    52. Dimitris K. Christopoulos & Efthymios G. Tsionas, 2004. "Convergence and regional productivity differences: Evidence from Greek prefectures," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 38(3), pages 387-396, September.
    53. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Stéphanie Barral & Cecile Detang-Dessendre, 2023. "Reforming the Common Agricultural Policy (2023–2027): multidisciplinary views," Review of Agricultural, Food and Environmental Studies, Springer, vol. 104(1), pages 47-50, March.

    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. 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.
    2. Minviel, Jean Joseph & Latruffe, Laure, 2014. "Meta-regression analysis of the impact of agricultural subsidies on farm technical efficiency," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 182767, European Association of Agricultural Economists.
    3. Abdullah Mamun, 2024. "Impact of farm subsidies on global agricultural productivity," Agricultural Economics, International Association of Agricultural Economists, vol. 55(2), pages 346-364, March.
    4. repec:lic:licosd:40918 is not listed on IDEAS
    5. Benos, Nikos & Karagiannis, Stelios, 2016. "Do education quality and spillovers matter? Evidence on human capital and productivity in Greece," Economic Modelling, Elsevier, vol. 54(C), pages 563-573.
    6. Benos, Nikos & Karagiannis, Stelios, 2013. "Do Cross-Section Dependence and Parameter Heterogeneity Matter? Evidence on Human Capital and Productivity in Greece," MPRA Paper 53326, University Library of Munich, Germany.
    7. Magrini, Stefano, 2004. "Regional (di)convergence," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 62, pages 2741-2796, Elsevier.
    8. Khafagy, Amr & Vigani, Mauro, 2022. "Technical change and the Common Agricultural Policy," Food Policy, Elsevier, vol. 109(C).
    9. 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.
    10. Steven Yamarik, 2011. "Human capital and state-level economic growth: what is the contribution of schooling?," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 47(1), pages 195-211, August.
    11. Petrick, Martin & Kloss, Mathias, 2013. "Identifying Factor Productivity from Micro-data: The case of EU agriculture," Working papers 144004, Factor Markets, Centre for European Policy Studies.
    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. 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).
    14. Aiello, Francesco & Scoppa, Vincenzo, 2008. "Convergence and Regional Productivity Divide in Italy: Evidence from Panel Data," MPRA Paper 17343, University Library of Munich, Germany.
    15. 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.
    16. repec:zbw:iamodp:271870 is not listed on IDEAS
    17. Annie Tubadji & Vassilis Angelis & Peter Nijkamp, 2016. "Endogenous intangible resources and their place in the institutional hierarchy," Review of Regional Research: Jahrbuch für Regionalwissenschaft, Springer;Gesellschaft für Regionalforschung (GfR), vol. 36(1), pages 1-28, February.
    18. Johanna Vogel, 2015. "The two faces of R&D and human capital: Evidence from Western European regions," Papers in Regional Science, Wiley Blackwell, vol. 94(3), pages 525-551, August.
    19. Baldoni, Edoardo & Ciaian, Pavel, 2023. "The capitalization of CAP subsidies into land prices in the EU," Land Use Policy, Elsevier, vol. 134(C).
    20. Stefano Magrini, 2007. "Analysing Convergence through the Distribution Dynamics Approach: Why and how?," Working Papers 2007_13, Department of Economics, University of Venice "Ca' Foscari".
    21. Bernini, Cristina & Galli, Federica, 2024. "Economic and Environmental Efficiency, Subsidies and Spatio-Temporal Effects in Agriculture," Ecological Economics, Elsevier, vol. 218(C).
    22. Maria Martinez Cillero & Fiona Thorne & Michael Wallace & James Breen & Thia Hennessy, 2018. "The Effects of Direct Payments on Technical Efficiency of Irish Beef Farms: A Stochastic Frontier Analysis," Journal of Agricultural Economics, Wiley Blackwell, vol. 69(3), pages 669-687, September.

    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:ags:frrfes:308880. 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: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/inrapfr.html .

    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.