Assessing European Farmers’ Intentions In The Light Of The 2003 Cap Reform

The effects of the 2003 CAP reform on the farmers’ decisions on whether to abandon their farming activity, how much to produce and what to produce are analyzed in the present paper. To this effect data collected for Hungarian, Dutch and Greek farmers on their perceptions about the reform and its effects, and on their production intentions is analyzed using discrete choice models under 3 alternative scenarios for the future produce prices. The discrete choice model applied in the present paper is sequential since farmers are confronted with a sequence of choices. In the first stage, the choice is between abandoning farming or continuing, then those farmers who have chosen to continue are presented with two additional choices related to their level of production and crop mix. Some of the results of the analysis point out that the evolution of future prices, level of information about Cap reform, farm size play an important role in the decision to abandon or continue. In the case of Hungary and Greece, younger farmers are less likely to abandon, more likely to increase production and change crop mix than their older counterparts, emphasizing the importance of aids to the young.