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Farm-level economic impacts of EU-CAP greening measures

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  • Louhichi, Kamel
  • Ciaian, Pavel
  • Espinosa, Maria
  • Colen, Liesbeth
  • Perni, Angel
  • Gomez y Paloma, Sergio

Abstract

This paper presents the first EU-wide individual farm-level model (IFM-CAP) intending to assess the impacts of CAP towards 2020 on farm economic and environmental performances across Europe. IFM-CAP is a static positive programming model applied to each EU-FADN individual farm -around 60500 farms- to guarantee the highest representativeness of the EU agricultural sector and to capture the full heterogeneity across EU farms in terms of policy representation and impacts. The model is used to assess the effects of the crop diversification measure, given that it is one of the most challenging aspects of the EU greening policy in terms of modelling and because of the farm-specificity of its implementation and impact. Results show that most non-compliant farms (80 %) chose to reduce their level of non-compliance following the introduction of the diversification measure owing to the sizable subsidy reduction imposed in case of non-compliance. However, the overall impact on farm income is rather limited: farm income decreases by less than 1 % at EU level, and only 5 % of the farm population will be negatively affected. Nevertheless, for a small number of farms, the income effect could be more substantial (more than –10 %).

Suggested Citation

  • Louhichi, Kamel & Ciaian, Pavel & Espinosa, Maria & Colen, Liesbeth & Perni, Angel & Gomez y Paloma, Sergio, 2015. "Farm-level economic impacts of EU-CAP greening measures," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205309, Agricultural and Applied Economics Association;Western Agricultural Economics Association.
  • Handle: RePEc:ags:aaea15:205309
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    Citations

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    Cited by:

    1. Tillie, Pascal & Louhichi, Kamel & Paloma, Sergio Gomez y, 2016. "Modelling the farm household impacts of a small irrigation program in Niger," 2016 AAAE Fifth International Conference, September 23-26, 2016, Addis Ababa, Ethiopia 249267, African Association of Agricultural Economists (AAAE).
    2. Riesgo, Laura & Louhichi, Kamel & Paloma, Sergio Gomez y, 2016. "Modelling farm-household level impacts of fertilizer subsidy programs on productivity and food security: The case of Ethiopia," 2016 AAAE Fifth International Conference, September 23-26, 2016, Addis Ababa, Ethiopia 249265, African Association of Agricultural Economists (AAAE).

    More about this item

    Keywords

    Common Agricultural Policy; Greening; Crop Diversification; Farm-level Model; Positive Programming Model; EU; Agricultural and Food Policy; Environmental Economics and Policy; Research Methods/ Statistical Methods; C55; Q12; Q18;

    JEL classification:

    • C55 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Large Data Sets: Modeling and Analysis
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy

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