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Efficiency grounds and welfare effects in decoupling farm support. Insights from an AGE model of the Italian economy

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  • Barbara Cavalletti
  • Benedetto Rocchi

Abstract

This paper investigates both efficiency and redistributive effects of the recent reform of Common Agricultural Policy in Italy. A general equilibrium model has been calibrated on a social accounting matrix of the Italian economy, adapted to represent the distribution of agricultural income between households. In simulation results the decoupling of farm support proves to be a welfare-improving policy. Moreover, this welfare effect is enhanced by redistributing the support towards low-income agricultural households. In terms of possible policy implications, simulation results suggest that redistributive effects in decoupling farm support may be a crucial aspect for the allocation of the EU agricultural budget.

Suggested Citation

  • Barbara Cavalletti & Benedetto Rocchi, 2006. "Efficiency grounds and welfare effects in decoupling farm support. Insights from an AGE model of the Italian economy," International Journal of Sustainable Development, Inderscience Enterprises Ltd, vol. 9(2), pages 106-121.
  • Handle: RePEc:ids:ijsusd:v:9:y:2006:i:2:p:106-121
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    Citations

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    Cited by:

    1. Karine Daniel & Maureen Kilkenny, 2009. "Agricultural Subsidies and Rural Development," Journal of Agricultural Economics, Wiley Blackwell, vol. 60(3), pages 504-529.
    2. Paul Allanson & Benedetto Rocchi, 2008. "A comparative analysis of the redistributive effects of agricultural policy in Tuscany and Scotland," Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement, INRA Department of Economics, vol. 86(1), pages 35-56.
    3. Paul Allanson & Benedetto Rocchi, 2006. "An analysis of the redistributive effects of agricultural policy in Tuscany with comparative results for Scotland," Dundee Discussion Papers in Economics 193, Economic Studies, University of Dundee.
    4. Esposti, Roberto, 2008. "Reforming The Cap: An Agenda For Regional Growth?," 109th Seminar, November 20-21, 2008, Viterbo, Italy 44868, European Association of Agricultural Economists.

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