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.
RIZOV Marian;
POKRIVCAK Jan;
CIAIAN Pavel;
2013-12-10
WILEY-BLACKWELL
JRC85898
0021-857X,
http://onlinelibrary.wiley.com/doi/10.1111/1477-9552.12030/abstract,
https://publications.jrc.ec.europa.eu/repository/handle/JRC85898,
10.1111/1477-9552.12030,
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