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CAP Reform and Its Impact on Structural Change and Productivity Growth: A Cross Country Analysis

Author

Listed:
  • Andrius Kazukauskas

    (Department of Economics, Trinity College Dublin)

  • Carol Newman

    (Department of Economics, Trinity College Dublin)

  • Johannes Sauer

    (School of Social Sciences, University of Manchester)

Abstract

The decoupling of direct payments from production, introduced in the recent reform of the Common Agricultural Policy (CAP) is expected to make production decisions more market-oriented and farmers more productive. However, ex-post analyses of the productivity of farms have yet to uncover any evidence of a positive impact of the decoupling policy on farm productivity. Using Irish, Danish and Dutch farm level data, we identify whether the decoupling policy has contributed to productivity growth in agriculture and to what extent enterprise switching and specialisation are important productivity improving mechanisms. We find some evidence that the decoupling policy and related farm enterprise specialisation had significant positive effects on farm productivity.

Suggested Citation

  • Andrius Kazukauskas & Carol Newman & Johannes Sauer, 2011. "CAP Reform and Its Impact on Structural Change and Productivity Growth: A Cross Country Analysis," Trinity Economics Papers tep0411, Trinity College Dublin, Department of Economics.
    • Handle: RePEc:tcd:tcduee:tep0411
    as

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    File URL: http://www.tcd.ie/Economics/TEP/2011/TEP0411.pdf
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    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

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    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. 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.
    3. 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.
    4. 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.
    5. 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.
    6. 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.
    7. 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.
    8. 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.

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    More about this item

    Keywords

    productivity; subsidy decoupling; semi-parametric estimation; switching; specialisation;
    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

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