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Redistributive effects of CAP liberalisation: From the sectoral level to the single farm

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  • Deppermann, Andre
  • Offermann, Frank
  • Grethe, Harald

Abstract

There is a growing public and political interest in effects of agricultural policy on income distribution in the agricultural sector. Most of the literature regarding redistributive effects of agricultural policy is ex-post and static in nature and many tools for an ex-ante analysis of impacts of sectoral or macroeconomic policies depict farm groups or representative farms rather than individual farms. However, the measurement of inequality is highly sensitive to the aggregation of individual data. In this paper, redistributive effects of an abolishment of different instruments of the European Common Agricultural Policy (CAP) are analysed with a tool that is able to consistently assess impacts of sectoral policy on individual farm incomes. We find that an abolishment of the main components of the CAP, direct payments and market and price policies, results in a more unequal income distribution in relative terms, but a more equal income distribution in absolute terms. Based on the latter, we conclude that if the CAP aims at a more equal income distribution within the agricultural sector, then significant scope for improving the design of respective policy instruments exists.

Suggested Citation

  • Deppermann, Andre & Offermann, Frank & Grethe, Harald, 2016. "Redistributive effects of CAP liberalisation: From the sectoral level to the single farm," Journal of Policy Modeling, Elsevier, vol. 38(1), pages 26-43.
    • Handle: RePEc:eee:jpolmo:v:38:y:2016:i:1:p:26-43
    DOI: 10.1016/j.jpolmod.2015.11.002
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    2. Fradj, Nosra Ben & Rozakis, Stelios & Jayet, Pierre-Alain, 2018. "Post 2020 CAP in Poland: An impact analysis," 162nd Seminar, April 26-27, 2018, Budapest, Hungary 273108, European Association of Agricultural Economists.
    3. Dupraz, Catherine Laroche & Piet, Laurent, 2018. "Les choix français en matière de convergence des aides découplées de la PAC à l’horizon 2019," Économie rurale, French Society of Rural Economics (SFER Société Française d'Economie Rurale), vol. 366(October-D).
    4. O'Neill,Stephen & Loughrey, Jason & Hynes, Stephen & O'Donoghue, Cathal & Hanrahan, Kevin, 2017. "The Redistributive Impact of EU Farm Payment Reforms in the UK and Ireland," 2017 International Congress, August 28-September 1, 2017, Parma, Italy 261107, European Association of Agricultural Economists.
    5. Sadłowski, Adrian & Beluhova-Uzunova, Rositsa & Popp, József & Atanasov, Dimo & Ivanova, Boryana & Shishkova, Mariyana & Hristov, Krum, 2022. "Direct Payments Distribution Between Farmers in Selected New EU Member States," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 14(4), December.
    6. Mangirdas Morkunas & Povilas Labukas, 2020. "The Evaluation of Negative Factors of Direct Payments under Common Agricultural Policy from a Viewpoint of Sustainability of Rural Regions of the New EU Member States: Evidence from Lithuania," Agriculture, MDPI, vol. 10(6), pages 1-14, June.
    7. Nitta, Atomu & Yamamoto, Yasutaka & Kondo, Katsunobu & Sawauchi, Daisuke, 2020. "Direct payments to Japanese farmers: Do they reduce rice income inequality? Lessons for other Asian countries," Journal of Policy Modeling, Elsevier, vol. 42(5), pages 968-981.
    8. Stankov, Petar & Vasilev, Aleksandar, 2019. "Business reform outcomes: Why so different?," Journal of Policy Modeling, Elsevier, vol. 41(6), pages 1109-1127.

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    More about this item

    Keywords

    Farm model; Market model; Micro accounting; Income distribution;
    All these keywords.

    JEL classification:

    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution

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