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Effects of policy instruments on farm investments and production decisions in the Spanish cop sector

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  • Kallas, Zein
  • Gil, Jose Maria
  • Serra, Teresa

Abstract

Our paper asses the impacts of the partially decoupled (PD) scheme, implemented during the 1990s and first half of the 2000s in the framework of the Common Agricultural Policy (CAP), on on-farm investment as well as on other production decisions. The Spanish COP sector was taken as a case study due to its economic and political relevance. The empirical analysis is applied on farm-level data from the Farm Accountancy Data Network (FADN), observed from 2000 to 2004, based on. We use a reduced-form application of the dual model of investment under uncertainty and a system of censored and non censored equations is estimated. PD payments are found to increase short-run production and to generate a statically significant increase in the investment in farm assets. Results also show the importance of assessing the effects of PD payments in a dynamic framework as the one applied in this paper.

Suggested Citation

  • Kallas, Zein & Gil, Jose Maria & Serra, Teresa, 2009. "Effects of policy instruments on farm investments and production decisions in the Spanish cop sector," 113th Seminar, September 3-6, 2009, Chania, Crete, Greece 58036, European Association of Agricultural Economists.
  • Handle: RePEc:ags:eaa113:58036
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    Cited by:

    1. Carpentier, Alain & Gohin, Alexandre & Sckokai, Paolo & Thomas, Alban, 2015. "Economic modelling of agricultural production: past advances and new challenges," Revue d'Etudes en Agriculture et Environnement, Editions NecPlus, vol. 96(01), pages 131-165, March.
    2. Genius, Margarita, 2013. "Production and Off-Farm Employment Decisions of Greek and Hungarian Farmers in the Light of the Last CAP Refrom," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 0(Issue 2), pages 1-16.
    3. Viaggi, Davide & Raggi, Meri & Gomez y Paloma, Sergio, 2011. "Farm-household investment behaviour and the CAP decoupling: Methodological issues in assessing policy impacts," Journal of Policy Modeling, Elsevier, vol. 33(1), pages 127-145, January.
    4. Moro, Daniele & Sckokai, Paolo, 2013. "The impact of decoupled payments on farm choices: Conceptual and methodological challenges," Food Policy, Elsevier, vol. 41(C), pages 28-38.
    5. BOULANGER Pierre & PHILIPPIDIS George & URBAN Kirsten, 2017. "Assessing potential coupling factors of European decoupled payments with the Modular Agricultural GeNeral Equilibrium Tool (MAGNET)," JRC Working Papers JRC104276, Joint Research Centre (Seville site).
    6. Marconi, V. & Raggi, M. & Viaggi, D. & Lefebvre, M. & Gomez y Paloma, Sergio, 2015. "The impact of the 2013 Common Agricultural Policy reform on farmer's investment decisions: an ex-ante evaluation," 2015 Conference, August 9-14, 2015, Milan, Italy 212225, International Association of Agricultural Economists.

    More about this item

    Keywords

    Agricultural and Food Policy; Food Consumption/Nutrition/Food Safety;

    JEL classification:

    • 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
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General

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