IDEAS home Printed from https://ideas.repec.org/p/arx/papers/2009.07684.html
   My bibliography  Save this paper

The direct and indirect effect of CAP support on farm income enhancement:a farm-based econometric analysis

Author

Listed:
  • Simone Severini
  • Luigi Biagini

Abstract

We assess the correlation between CAP support provided to farmers and their income and use of capital and labour in the first year of the new CAP regime. This is done applying three regression models on the Italian FADN farms controlling for other farm characteristics. CAP annual payments are positively correlated with farm income and capital but are negatively correlated with labour use. Farm investment support provided by RDP measures is positively correlated to the amount of capital. Results suggest that CAP is positively affecting farm income directly but also indirectly by supporting the substitution of labour with capital

Suggested Citation

  • Simone Severini & Luigi Biagini, 2020. "The direct and indirect effect of CAP support on farm income enhancement:a farm-based econometric analysis," Papers 2009.07684, arXiv.org, revised Jul 2023.
    • Handle: RePEc:arx:papers:2009.07684
    as

    Download full text from publisher

    File URL: http://arxiv.org/pdf/2009.07684
    File Function: Latest version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Happe, Kathrin & Balmann, Alfons & Kellermann, Konrad & Sahrbacher, Christoph, 2008. "Does structure matter? The impact of switching the agricultural policy regime on farm structures," Journal of Economic Behavior & Organization, Elsevier, vol. 67(2), pages 431-444, August.
    2. Mark Brady & Konrad Kellermann & Christoph Sahrbacher & Ladislav Jelinek, 2009. "Impacts of Decoupled Agricultural Support on Farm Structure, Biodiversity and Landscape Mosaic: Some EU Results," Journal of Agricultural Economics, Wiley Blackwell, vol. 60(3), pages 563-585, September.
    3. Ani L. Katchova, 2008. "A Comparison of the Economic Well-Being of Farm and Nonfarm Households," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 90(3), pages 733-747.
    4. O’Toole, Conor & Hennessy, Thia, 2015. "Do decoupled payments affect investment financing constraints? Evidence from Irish agriculture," Food Policy, Elsevier, vol. 56(C), pages 67-75.
    5. Ciliberti, Stefano & Frascarelli, Angelo, 2015. "A critical assessment of the implementation of CAP 2014- 2020 direct payments in Italy," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), vol. 4(3), pages 1-17, December.
    6. Moro, Daniele & Sckokai, Paolo, 2013. "The impact of decoupled payments on farm choices: Conceptual and methodological challenges," Food Policy, Elsevier, vol. 41(C), pages 28-38.
    7. Fabio Boncinelli & Leonardo Casini, 2014. "A Comparison of the Well-Being of Agricultural and Non Agricultural Households Using a Multicriterial Approach," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 119(1), pages 183-195, October.
    8. Kilian, Stefan & Salhofer, Klaus, 2008. "Single Payments of the CAP: Where Do the Rents Go?," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 9(2).
    9. Roberto Esposti, 2007. "Regional Growth and Policies in the European Union: Does the Common Agricultural Policy Have a Counter-Treatment Effect?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 89(1), pages 116-134.
    10. Gardner, Bruce L, 1992. "Changing Economic Perspectives on the Farm Problem," Journal of Economic Literature, American Economic Association, vol. 30(1), pages 62-101, March.
    Full references (including those not matched with items on IDEAS)

    Citations

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


    Cited by:

    1. Agnė Žičkienė & Rasa Melnikienė & Mangirdas Morkūnas & Artiom Volkov, 2022. "CAP Direct Payments and Economic Resilience of Agriculture: Impact Assessment," Sustainability, MDPI, vol. 14(17), pages 1-24, August.

    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. Matthews, Alan & Salvatici, Luca & Scoppola, Margherita, 2017. "Trade Impacts of Agricultural Support in the EU," Commissioned Papers 252767, International Agricultural Trade Research Consortium.
    2. Sahrbacher, Christoph, 2011. "Regional structural change in European agriculture: Effects of decoupling and EU accession," Studies on the Agricultural and Food Sector in Transition Economies, Leibniz Institute of Agricultural Development in Transition Economies (IAMO), volume 60, number 60, September.
    3. Sardorbek Musayev & Jonathan Mellor & Tara Walsh & Emmanouil Anagnostou, 2022. "Application of Agent-Based Modeling in Agricultural Productivity in Rural Area of Bahir Dar, Ethiopia," Forecasting, MDPI, vol. 4(1), pages 1-22, March.
    4. Di Corato, Luca & Brady, Mark V., 2019. "Passive farming and land development: A real options approach," Land Use Policy, Elsevier, vol. 80(C), pages 32-46.
    5. Thomas Slijper & Yann de Mey & P Marijn Poortvliet & Miranda P M Meuwissen, 2022. "Quantifying the resilience of European farms using FADN," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 49(1), pages 121-150.
    6. Urban, Kirsten & Jensen, Hans G. & Brockmeier, Martina, 2016. "How decoupled is the Single Farm Payment and does it matter for international trade?," Food Policy, Elsevier, vol. 59(C), pages 126-138.
    7. Kremmydas, Dimitris & Athanasiadis, Ioannis N. & Rozakis, Stelios, 2018. "A review of Agent Based Modeling for agricultural policy evaluation," Agricultural Systems, Elsevier, vol. 164(C), pages 95-106.
    8. 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, Springer, vol. 100(1), pages 47-68, December.
    9. Britz, Wolfgang & Gocht, Alexander & Domínguez, Ignacio Pérez & Jansson, Torbjörn & Grosche, Stephanie-Carolin & Zhao, Na, 2012. "EU-Wide (Regional and Farm Level) Effects of Premium Decoupling and Harmonisation Following the Health Check Reform," Journal of International Agricultural Trade and Development, Journal of International Agricultural Trade and Development, vol. 61(1).
    10. Britz, Wolfgang & Gocht, Alexander & Domínguez, Ignacio Pérez & Jansson, Torbjörn & Grosche, Stephanie-Carolin & Zhao, Na, 2012. "EU-Wide (Regional and Farm Level) Effects of Premium Decoupling and Harmonisation Following the Health Check Reform," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 61(01), pages 1-13, February.
    11. Bruno Henry de Frahan & Jérémie Dong & Rembert De Blander, 2017. "Farm Household Incomes in OECD Member Countries over the Last 30 Years of Public Support," LIS Working papers 700, LIS Cross-National Data Center in Luxembourg.
    12. Luca Di Corato & Dimitrios Zormpas, 2022. "Investment in farming under uncertainty and decoupled support: a real options approach," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 49(4), pages 876-909.
    13. Ciliberti, Stefano & Frascarelli, Angelo, 2015. "The role of CAP in enhancing farm incomes: the redistributive effect of direct payments in Italy," 147th Seminar, October 7-8, 2015, Sofia, Bulgaria 212244, European Association of Agricultural Economists.
    14. Plogmann, Jana & Mußhoff, Oliver & Odening, Martin & Ritter, Matthias, 2022. "Farm growth and land concentration," Land Use Policy, Elsevier, vol. 115(C).
    15. Frahan, Bruno Henry de & Nkunzimana, Tharcisse & De Blander, Rembert & Gaspart, Frederic & Sumner, Daniel A., 2008. "Farm Household Incomes And Reforming The Cap," 109th Seminar, November 20-21, 2008, Viterbo, Italy 44814, European Association of Agricultural Economists.
    16. Mark V. Brady & Jordan Hristov & Christoph Sahrbacher & Torben Söderberg & Fredrik Wilhelmsson, 2017. "Is Passive Farming A Problem for Agriculture in the EU?," Journal of Agricultural Economics, Wiley Blackwell, vol. 68(3), pages 632-650, September.
    17. Martin Nordin & Sören Höjgård, 2019. "Earnings and Disposable Income of Farmers in Sweden, 1997–2012," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 41(1), pages 153-173, March.
    18. Rocchi, B & Marino, M & Severini, S, 2018. "Does a farm household income problem still exist in the European Union?," 2018 Seventh AIEAA Conference, June 14-15, Conegliano, Italy 275653, Italian Association of Agricultural and Applied Economics (AIEAA).
    19. Taisuke Takayama & Tomoaki Nakatani & Tetsuji Senda & Takeshi Fujie, 2021. "Less‐favoured‐area payments, farmland abandonment and farm size: evidence from hilly and mountainous areas in Japan," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 65(3), pages 658-678, July.
    20. Spiegel, Alisa & Coletta, Attilio & Severini, Simone, 2022. "The distortive effect of organic payments: An example of policy failure in the case of hazelnut plantation," Land Use Policy, Elsevier, vol. 119(C).

    More about this item

    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:arx:papers:2009.07684. 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: arXiv administrators (email available below). General contact details of provider: http://arxiv.org/ .

    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.