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Impact of CAP direct payments on French farms’ managerial efficiency

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  • Laure Latruffe

    (SMART-LERECO - Structures et Marché Agricoles, Ressources et Territoires - INRA - Institut National de la Recherche Agronomique - AGROCAMPUS OUEST)

  • Herve Guyomard

    (Laboratoire de Microbiologie - INRA - Institut National de la Recherche Agronomique - UB - Université de Bourgogne - ENSBANA - Ecole Nationale Supérieure de Biologie Appliquée à la Nutrition et à l'Alimentation de Dijon)

  • Chantal Le Mouël

    (SMART-LERECO - Structures et Marché Agricoles, Ressources et Territoires - INRA - Institut National de la Recherche Agronomique - AGROCAMPUS OUEST)

Abstract

This paper investigates the relationship between CAP direct payments and managerial efficiency for French crop and beef farms. Managerial efficiency scores are calculated using a four-step approach that allows disentangling managerial inefficiency from other technical inefficiency components, notably what is due to unfavourable environment conditions. Then managerial efficiency scores are regressed over a set of explanatory variables, including CAP direct payments. Our empirical application, based on individual farm data and meteorological data at the municipality level for the year 2000, shows that there is a substantial component of inefficiency that is due to unfavourable conditions. Moreover, there is a significant negative relationship between managerial efficiency and CAP direct payments for crop farms, but a positive relationship for livestock farms. The type of payments also matter, with area-based and Less Favoured Area payments reducing crop farms' efficiency but headage and agri-environmental payments increasing beef farms' efficiency.

Suggested Citation

  • Laure Latruffe & Herve Guyomard & Chantal Le Mouël, 2008. "Impact of CAP direct payments on French farms’ managerial efficiency," Post-Print hal-02818109, HAL.
    • Handle: RePEc:hal:journl:hal-02818109
    Note: View the original document on HAL open archive server: https://hal.inrae.fr/hal-02818109v1
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    References listed on IDEAS

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    Cited by:

    1. Fogarasi, Jozsef & Latruffe, Laure, 2009. "Farm performance and support in Central and Western Europe: a comparison of Hungary and France," 83rd Annual Conference, March 30 - April 1, 2009, Dublin, Ireland 51053, Agricultural Economics Society.
    2. Bachev, Hrabrin, 2011. "Effects of EU CAP implementation on Bulgarian farms," MPRA Paper 35510, University Library of Munich, Germany.
    3. Esposti, Roberto, 2008. "Reforming The Cap: An Agenda For Regional Growth?," 109th Seminar, November 20-21, 2008, Viterbo, Italy 44868, European Association of Agricultural Economists.
    4. Józwiak, Wojciech & Kagan, Adam & Mirkowska, Zofia, 2014. "Innovations on the Polish farms, their scope of implementation and significance," Problems of Agricultural Economics / Zagadnienia Ekonomiki Rolnej 235396, Institute of Agricultural and Food Economics - National Research Institute (IAFE-NRI).

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