CAP Subsidies and the Productivity of EU Farms

Factor Markets Working Paper No. 37, March 2013

28 Pages Posted: 7 Jun 2013

See all articles by Marian Rizov

Marian Rizov

University of Lincoln (UK) - Lincoln International Business School; Lincoln Economics and Finance (LEAF) Research Group

Jan Pokrivcak

Slovak University of Agriculture - Department of Economics

Pavel Ciaian

Catholic University of Leuven (KUL) - LICOS Center for Transition Economics

Date Written: March 26, 2013

Abstract

This paper investigates the impact of subsidies from the common agricultural policy on the total factor productivity of farms in the EU. We employ a structural, semi-parametric estimation algorithm, directly incorporating the effect of subsidies into a model of unobserved productivity. We empirically study the effects using samples from the Farm Accountancy Data Network for EU-15 countries. Our main findings are clear: subsidies had a negative impact on farm productivity in the period before the decoupling reform was implemented; after decoupling the effect of subsidies on productivity was more nuanced, as in several countries it turned positive.

Keywords: CAP subsidies, productivity, EU farms, farming, CAP, Farm Accountancy Data Network

Suggested Citation

Rizov, Marian and Pokrivcak, Jan and Ciaian, Pavel, CAP Subsidies and the Productivity of EU Farms (March 26, 2013). Factor Markets Working Paper No. 37, March 2013, Available at SSRN: https://ssrn.com/abstract=2275273

Marian Rizov (Contact Author)

University of Lincoln (UK) - Lincoln International Business School ( email )

Brayford Pool
Lincoln, LN6 7TS
United Kingdom

Lincoln Economics and Finance (LEAF) Research Group ( email )

United Kingdom

Jan Pokrivcak

Slovak University of Agriculture - Department of Economics

Pavel Ciaian

Catholic University of Leuven (KUL) - LICOS Center for Transition Economics ( email )

Waaistraat 6 - box 3511
Leuven, 3000
Belgium

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