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Degressivity, capping and European farm structure: New evidence from Hungary

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  • Szerletics, Ákos

Abstract

The debate on reforming the Common Agricultural Policy (CAP) after 2020 had already started when the European Commis¬sion published its own vision on the future of agriculture and food production in the European Union. One of the key aspects of this debate relates to the revision of the system of EU direct payments by revising degressivity and capping rules. Although it has, for a long time, been a popular idea to limit payments to larger farms in one way or another, and subsidise smaller agri¬cultural holdings instead, this idea has serious drawbacks as this paper shows. The aim of this study is to analyse the impact of degressivity and capping on European farm structures by reviewing existing literature on the topic as well as by providing new evidence from Hungary. Results suggest that placing a cap on direct payments may be causing more harm than good in terms of land use change.

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  • Szerletics, Ákos, 2018. "Degressivity, capping and European farm structure: New evidence from Hungary," Studies in Agricultural Economics, Research Institute for Agricultural Economics, vol. 120(2), August.
    • Handle: RePEc:ags:stagec:276086
    DOI: 10.22004/ag.econ.276086
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    References listed on IDEAS

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    1. Tocco, Barbara & Davidova, Sophia & Bailey, Alastair, 2013. "The Impact of CAP Payments on the Exodus of Labour from Agriculture in Selected EU Member States," Working papers 160742, Factor Markets, Centre for European Policy Studies.
    2. Gunnar Breustedt & Thomas Glauben, 2007. "Driving Forces behind Exiting from Farming in Western Europe," Journal of Agricultural Economics, Wiley Blackwell, vol. 58(1), pages 115-127, February.
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    Cited by:

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    2. Balezentis, Tomas & Ribasauskiene, Erika & Morkunas, Mangirdas & Volkov, Artiom & Streimikiene, Dalia & Toma, Pierluigi, 2020. "Young farmers’ support under the Common Agricultural Policy and sustainability of rural regions: Evidence from Lithuania," Land Use Policy, Elsevier, vol. 94(C).
    3. Mizik, Tamás, 2019. "A közös agrárpolitika 2013. évi közvetlen támogatási rendszerének hatásai a magyar mezőgazdaságra [Impacts of the 2013 CAP direct-support system on Hungarian agriculture]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(11), pages 1210-1229.
    4. Agnė Žičkienė & Rasa Melnikienė & Mangirdas Morkūnas & Artiom Volkov, 2022. "CAP Direct Payments and Economic Resilience of Agriculture: Impact Assessment," Sustainability, MDPI, vol. 14(17), pages 1-24, August.

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