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Potential impact of the EU Single Area Payment on farm restructuring and efficiency in Lithuania

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  • Elodie Douarin
  • Laure Latruffe

Abstract

This paper investigates the potential impact of post EU-accession public support, namely the introduction of the decoupled Single Area Payment (SAP), in Lithuania on its farming sector’s restructuring and future efficiency. Analyses are based on efficiency calculations with 2001-2002 FADN data for fieldcrop farms, and on the same sample’s farmers’ intentions to remain in the sector and to expand their area post EU-accession under two scenarios: a hypothetical scenario of continuing pre-accession national policies, and a realistic scenario of fully decoupled SAP introduction with coupled national top-ups. Our results suggest that, before accession to the EU, the smallest inefficient farms remained in the sector thanks to the policy support. However, the SAP introduction could potentially give the right incentives to Lithuanian farmers for a quicker restructuring and an increase in farm efficiency, although such change may be impeded by the lack of available agricultural land.

Suggested Citation

  • Elodie Douarin & Laure Latruffe, 2010. "Potential impact of the EU Single Area Payment on farm restructuring and efficiency in Lithuania," Working Papers SMART - LERECO 10-08, INRA UMR SMART-LERECO.
  • Handle: RePEc:rae:wpaper:201008
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    References listed on IDEAS

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    1. Johan Swinnen & Liesbet Vranken, 2006. "Causes of Efficiency Change in Transition: Theory and Cross-Country Survey Evidence from Agriculture," LICOS Discussion Papers 17206, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
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    Cited by:

    1. Tomas Baležentis & Irena Kriščiukaitienė & Alvydas Baležentis, 2014. "A nonparametric analysis of the determinants of family farm efficiency dynamics in Lithuania," Agricultural Economics, International Association of Agricultural Economists, vol. 45(5), pages 589-599, September.
    2. Minviel, Jean Joseph & Latruffe, Laure, 2014. "Meta-regression analysis of the impact of agricultural subsidies on farm technical efficiency," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 182767, European Association of Agricultural Economists.
    3. Tomas Baležentis, 2015. "The Sources of the Total Factor Productivity Growth in Lithuanian Family Farms: A Färe-Primont Index Approach," Prague Economic Papers, University of Economics, Prague, vol. 2015(2), pages 225-241.
    4. Tomas Baležentis, 2014. "Total factor productivity in the Lithuanian family farms after accession to the EU: application of the bias-corrected Malmquist indices," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 41(4), pages 731-746, November.

    More about this item

    Keywords

    Single Area Payment; technical efficiency; size; subsidies; Lithuania;

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets

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