IDEAS home Printed from https://ideas.repec.org/p/ags/eaa114/61103.html
   My bibliography  Save this paper

CAP reform and its impact on structural change and productivity growth: A cross country analysis

Author

Listed:
  • Kazukauskas, Andrius
  • Newman, Carol F.

Abstract

The recent reforms of the Common Agricultural Policy (CAP) have exposed the European agricultural sector to a new set of constraints and challenges. The decoupling of direct payments from production is expected to make production decisions more market-oriented as farmers move from mainly subsidy revenue maximization objectives toward profit maximizing behaviour. However, ex-post analyses of the productivity of farms have yet to uncover any evidence of a positive effect of the decoupling policy on farm productivity. Using the Irish, Danish and Dutch farm level data, we identify the extent to which both system and product switching after the introduction of decoupling has occurred and to what extent these changes have contributed to productivity growth in the agriculture. We find some evidence that the decoupling policy had positive significant effects on farm productivity but the product switching behaviour associated with the changes in farm decoupling rates have not led to productivity improvements.

Suggested Citation

  • Kazukauskas, Andrius & Newman, Carol F., 2010. "CAP reform and its impact on structural change and productivity growth: A cross country analysis," 114th Seminar, April 15-16, 2010, Berlin, Germany 61103, European Association of Agricultural Economists.
    • Handle: RePEc:ags:eaa114:61103
    DOI: 10.22004/ag.econ.61103
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/61103/files/kazukauskas.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.61103?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Jan De Loecker, 2011. "Product Differentiation, Multiproduct Firms, and Estimating the Impact of Trade Liberalization on Productivity," Econometrica, Econometric Society, vol. 79(5), pages 1407-1451, September.
    2. Nigel Key & Ruben N. Lubowski & Michael J. Roberts, 2005. "Farm-Level Production Effects from Participation in Government Commodity Programs: Did the 1996 Federal Agricultural Improvement and Reform Act Make a Difference?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(5), pages 1211-1219.
    Full references (including those not matched with items on IDEAS)

    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Impact of CAP subsidies on productivity - by Alan Matthews
      by Alan Matthews in CAP Reform.eu on 2013-04-02 02:50:25

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Marie-Noelle Duquenne & Maria Tsiapa & Valantis Tsiakos, 2019. "Contribution of the Common Agricultural Policy to agricultural productivity of EU regions during 2004–2012 period," Review of Agricultural, Food and Environmental Studies, INRA Department of Economics, vol. 100(1-4), pages 47-68.
    2. Loizou, Efstratios & Karelakis, Christos & Galanopoulos, Konstantinos & Mattas, Konstadinos, 2019. "The role of agriculture as a development tool for a regional economy," Agricultural Systems, Elsevier, vol. 173(C), pages 482-490.
    3. Bumbescu Sorina Simona, 2020. "Analysis of Economic Performance in Agriculture Using Econometric Modeling," Studia Universitatis „Vasile Goldis” Arad – Economics Series, Sciendo, vol. 30(3), pages 118-128, September.
    4. Wei Wang & Chongmei Zhang & Jiahao Song & Dingde Xu, 2021. "The Impact of Target Price Policy on Cotton Cultivation: Analysis of County-Level Panel Data from China," Agriculture, MDPI, vol. 11(10), pages 1-18, October.
    5. Cristina Mavrodin, 2015. "The role of european funds for agriculture and rural development in europe: a comparative perspective," International Conference on Competitiveness of Agro-food and Environmental Economy Proceedings, The Bucharest University of Economic Studies, vol. 4, pages 202-210.
    6. Arovuori, Kyösti & Yrjölä, Tapani, 2015. "The impact of the CAP and its reforms on the productivity growth in agriculture," 147th Seminar, October 7-8, 2015, Sofia, Bulgaria 212241, European Association of Agricultural Economists.
    7. Liyun Zhu & Alfons Oude Lansink, 2022. "Dynamic sustainable productivity growth of Dutch dairy farming," PLOS ONE, Public Library of Science, vol. 17(2), pages 1-19, February.
    8. Jaraite, Jurate & Kažukauskas, Andrius, 2011. "The effect of mandatory agro-environmental policy on farm environmental performance," CERE Working Papers 2011:13, CERE - the Center for Environmental and Resource Economics.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Andrius Kazukauskas & Carol Newman & Johannes Sauer, 2014. "The impact of decoupled subsidies on productivity in agriculture: a cross-country analysis using microdata," Agricultural Economics, International Association of Agricultural Economists, vol. 45(3), pages 327-336, May.
    2. Andrea Pufahl & Christoph R. Weiss, 2009. "Evaluating the effects of farm programmes: results from propensity score matching," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 36(1), pages 79-101, March.
    3. Florin Maican & Matilda Orth, 2017. "Productivity Dynamics and the Role of ‘Big-Box’ Entrants in Retailing," Journal of Industrial Economics, Wiley Blackwell, vol. 65(2), pages 397-438, June.
    4. Geoffrey Barrows & Hélène Ollivier & Ariell Reshef, 2023. "Production Function Estimation with Multi-Destination Firms," CESifo Working Paper Series 10716, CESifo.
    5. Emanuele Forlani & Ralf Martin & Giordano Mion & Mirabelle Muûls, 2023. "Unraveling Firms: Demand, Productivity and Markups Heterogeneity," The Economic Journal, Royal Economic Society, vol. 133(654), pages 2251-2302.
    6. Bas, Maria & Paunov, Caroline, 2021. "Disentangling trade reform impacts on firm market and production decisions," European Economic Review, Elsevier, vol. 135(C).
    7. Mario Macis & Fabiano Schivardi, 2016. "Exports and Wages: Rent Sharing, Workforce Composition, or Returns to Skills?," Journal of Labor Economics, University of Chicago Press, vol. 34(4), pages 945-978.
    8. Catherine Fuss & Angelos Theodorakopoulos, 2018. "Compositional Changes in Aggregate Productivity in an Era of Globalisation and Financial Crisis," Working Papers of VIVES - Research Centre for Regional Economics 627696, KU Leuven, Faculty of Economics and Business (FEB), VIVES - Research Centre for Regional Economics.
    9. Li, Linjie & Liu, Xiaming & Yuan, Dong & Yu, Miaojie, 2017. "Does outward FDI generate higher productivity for emerging economy MNEs? – Micro-level evidence from Chinese manufacturing firms," International Business Review, Elsevier, vol. 26(5), pages 839-854.
    10. Philip Du Caju & François Rycx & Ilan Tojerow, 2012. "Wage structure effects of international trade in a small open economy: the case of Belgium," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 148(2), pages 297-331, June.
    11. Alessandro Borin & Michele Mancini, 2016. "Foreign direct investment and firm performance: an empirical analysis of Italian firms," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 152(4), pages 705-732, November.
    12. Amit Gandhi & Salvador Navarro & David Rivers, 2011. "On the Identification of Production Functions: How Heterogeneous is Productivity?," University of Western Ontario, Centre for Human Capital and Productivity (CHCP) Working Papers 20119, University of Western Ontario, Centre for Human Capital and Productivity (CHCP).
    13. David Van Dijcke, 2022. "On the Non-Identification of Revenue Production Functions," Papers 2212.04620, arXiv.org, revised May 2024.
    14. Alex Clymo, 2019. "Dispersion Over the Business Cycle: Productivity versus Demand," 2019 Meeting Papers 1125, Society for Economic Dynamics.
    15. Justin Pierce, 2013. "Antidumping Duties and Plant-Level Restructuring," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 42(4), pages 435-447, June.
    16. Andrew B. Bernard & Ilke Van Beveren & Hylke Vandenbussche, 2014. "Multi-Product Exporters and the Margins of Trade," The Japanese Economic Review, Japanese Economic Association, vol. 65(2), pages 142-157, June.
    17. Kasahara, Hiroyuki & Lapham, Beverly, 2013. "Productivity and the decision to import and export: Theory and evidence," Journal of International Economics, Elsevier, vol. 89(2), pages 297-316.
    18. Emin Dinlersoz & Zoltan Wolf, 2024. "Automation, labor share, and productivity: plant-level evidence from U.S. manufacturing," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 33(4), pages 604-626, May.
    19. Pham Phuong Ngoc & Dainn Wie, 2023. "Fishing in Troubled Waters: The Impact of the US-China Trade War on Vietnam," GRIPS Discussion Papers 23-06, National Graduate Institute for Policy Studies.
    20. Ruben Dewitte & Michel Dumont & Glenn Rayp & Peter Willemé, 2022. "Unobserved heterogeneity in the productivity distribution and gains from trade," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 55(3), pages 1566-1597, August.

    More about this item

    Keywords

    Agricultural and Food Policy; Farm Management; Land Economics/Use;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:eaa114:61103. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/eaaeeea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.