CAP subsidies and productivity of the EU farms
نویسندگان
چکیده
CAP subsidies and productivity of the EU farms Marian Rizov, Jan Pokrivcak and Pavel Ciaian 1 [Original submitted June 2012, Revision received March 2013, Accepted May 2013] Abstract The paper investigates the impact of the Common Agricultural Policy (CAP) subsidies on farm total factor productivity (TFP) in the European Union (EU). We employ a structural semiparametric estimation algorithm directly incorporating the effect of subsidies into a model of unobserved productivity. We empirically study the effects using the Farm Accountancy Data Network (FADN) samples for the EU-15 countries. Our main findings are clear: subsidies impact negatively farm productivity in the period before the decoupling reform was implemented; after decoupling the effect of subsidies on productivity is more nuanced and in several countries it turned positive.
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