Title: CAP Subsidies and Productivity of the EU Farms
Citation: JOURNAL OF AGRICULTURAL ECONOMICS vol. 64 no. 3 p. 537–557
Publication Year: 2013
JRC N°: JRC85898
ISSN: 0021-857X
URI: http://onlinelibrary.wiley.com/doi/10.1111/1477-9552.12030/abstract
DOI: 10.1111/1477-9552.12030
Type: Articles in periodicals and books
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.
JRC Directorate:Growth and Innovation

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