CAP subsidies and productivity of the EU farms

Rizov, Marian, Pokrivcak, Jan and Ciaia, Pavel (2013) CAP subsidies and productivity of the EU farms. Journal of Agricultural Economics, 64 (3). pp. 537-557. ISSN 0021-857X

Full content URL: http://onlinelibrary.wiley.com/doi/10.1111/1477-95...

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Abstract

The paper investigates the impact of the Common Agricultural Policy (CAP) subsidies
on farm total factor productivity (TFP) in the European Union (EU). We
employ a structural semi-parametric estimation algorithm directly incorporating
the effect of subsidies into a model of unobserved productivity. We empirically
study the effects using the Farm Accountancy Data Network (FADN) samples for
the EU-15 countries. Our main findings are clear: subsidies impact negatively on
farm productivity in the period before the decoupling reform was implemented;
after decoupling the effect of subsidies on productivity is more nuanced and in
several countries it turned positive.

Keywords:CAP subsidies, investment, productivity, micro data, EU farms
Subjects:L Social studies > L140 Econometrics
L Social studies > L112 Agricultural Economics
L Social studies > L120 Microeconomics
L Social studies > L241 European Union Politics
Divisions:Lincoln International Business School
ID Code:19053
Deposited On:16 Oct 2015 11:21

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