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Impact of CAP direct payments on French farms’ managerial efficiency

Author

Listed:
  • Herve Guyomard

    () (Économie et Sociologie Rurales - INRA - Institut National de la Recherche Agronomique)

  • Laure Latruffe

    () (Économie et Sociologie Rurales - INRA - Institut National de la Recherche Agronomique)

  • Chantal Le Mouel

    () (Économie et Sociologie Rurales - INRA - Institut National de la Recherche Agronomique)

Abstract

This paper investigates the relationship between CAP direct payments and managerial efficiency for French crop farms. Managerial efficiency scores are calculated using a four-step approach that allows to disentangle managerial inefficiency from other technical inefficiency components, notably what is due to unfavourable environment conditions. Then managerial efficiency scores are regressed over a set of explanatory variables, including the CAP direct payments. Our empirical application, based on individual farm data over the period 1995-2002, shows that for French crop farms, there is a strongly significant negative relationship between managerial efficiency and CAP direct payments. This indicates that French crop farms that are more supported are less efficient, conform to expectations and to empirical results obtained in other studies.

Suggested Citation

  • Herve Guyomard & Laure Latruffe & Chantal Le Mouel, 2007. "Impact of CAP direct payments on French farms’ managerial efficiency," Post-Print hal-02285592, HAL.
  • Handle: RePEc:hal:journl:hal-02285592
    Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-02285592
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    References listed on IDEAS

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    1. Joel Bergsman, 1974. "Commercial Policy, Allocative Efficiency, and "X-Efficiency"," The Quarterly Journal of Economics, Oxford University Press, vol. 88(3), pages 409-433.
    2. Hervé Guyomard & Alexandre Gohin & Chantal Le Mouël, 2001. "Instruments de soutien interne des revenus agricoles et effets de distorsion sur les échanges. Un modèle avec libre entrée et endogénéisation du prix de la terre," Revue Économique, Programme National Persée, vol. 52(3), pages 673-682.
    3. Harold Fried & Shelton Schmidt & Suthathip Yaisawarng, 1999. "Incorporating the Operating Environment Into a Nonparametric Measure of Technical Efficiency," Journal of Productivity Analysis, Springer, vol. 12(3), pages 249-267, November.
    4. Konstantinos Giannakas & Richard Schoney & Vangelis Tzouvelekas, 2001. "Technical Efficiency, Technological Change and Output Growth of Wheat Farms in Saskatchewan," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 49(2), pages 135-152, July.
    5. Alvarez, Antonio & Arias, Carlos, 2004. "Technical efficiency and farm size: a conditional analysis," Agricultural Economics, Blackwell, vol. 30(3), pages 241-250, May.
    6. Rezitis, Anthony N. & Tsiboukas, Kostas & Tsoukalas, Stauros, 2003. "Investigation of Factors Influencing the Technical Efficiency of Agricultural Producers Participating in Farm Credit Programs: The Case of Greece," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 35(3), pages 1-13, December.
    7. Martin, John P, 1978. "X-inefficiency, Managerial Effort and Protection," Economica, London School of Economics and Political Science, vol. 45(179), pages 273-286, August.
    8. Martin, John P & Page, John M, Jr, 1983. "The Impact of Subsidies on X-Efficiency in LDC Industry: Theory and an Empirical Test," The Review of Economics and Statistics, MIT Press, vol. 65(4), pages 608-617, November.
    9. Howard D. Leathers, 1992. "The Market for Land and the Impact of Farm Programs on Farm Numbers," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 74(2), pages 291-298.
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    Cited by:

    1. Fogarasi, Jozsef & Latruffe, Laure, 2009. "Farm performance and support in Central and Western Europe: a comparison of Hungary and France," 83rd Annual Conference, March 30 - April 1, 2009, Dublin, Ireland 51053, Agricultural Economics Society.
    2. Bachev, Hrabrin, 2011. "Effects of EU CAP implementation on Bulgarian farms," MPRA Paper 35510, University Library of Munich, Germany.
    3. 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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