Disinvestment, Farm Size, and Gradual Farm Exit: The Impact of Subsidy Decoupling in a European Context

20 Pages Posted: 15 Apr 2020

See all articles by Andrius Kazukauskas

Andrius Kazukauskas

affiliation not provided to SSRN

Carol Newman

Trinity College (Dublin)

Daragh Clancy

European Stability Mechanism

Johannes Sauer

Technische Universität München (TUM)

Date Written: October 2013

Abstract

The recent reform of the Common Agricultural Policy, which decouples farm subsidies from production, is expected to impact on farmers' production decisions. We perform a cross‐country farm‐level empirical analysis of farmers' production responses to these reforms using a panel dataset for the EU15 countries for the period 2001–2007. We apply quasi‐experimental empirical methods and find that the probability of a farm disinvesting decreased due to the policy change for most farms. However, the policy change facilitated exit for farms engaged in livestock production and those that were already in the process of leaving the sector.

Keywords: difference-in-differences, disinvestment, farm exit, farmland reduction, subsidy decoupling

Suggested Citation

Kazukauskas, Andrius and Newman, Carol and Clancy, Daragh and Sauer, Johannes, Disinvestment, Farm Size, and Gradual Farm Exit: The Impact of Subsidy Decoupling in a European Context (October 2013). American Journal of Agricultural Economics, Vol. 95, Issue 5, pp. 1068-1087, 2013, Available at SSRN: https://ssrn.com/abstract=3573667 or http://dx.doi.org/10.1093/ajae/aat048

Andrius Kazukauskas (Contact Author)

affiliation not provided to SSRN

No Address Available

Carol Newman

Trinity College (Dublin) ( email )

2-3 College Green
Dublin, Leinster D2
Ireland

Daragh Clancy

European Stability Mechanism ( email )

6a Circuit de la Foire Internationale
L-1347
Luxembourg

Johannes Sauer

Technische Universität München (TUM) ( email )

Arcisstrasse 21
Munich, DE 80333
Germany

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