The economic impacts of direct payments is a widely studied field in the literature related to the Common Agricultural Policy. This article aims to provide a systematic review of the income-related impacts of direct payments. In doing so, the article screened the academic literature on the impacts of direct payments and identified 150 relevant ones, out of which 41 were written directly on income-related effects. Relevant articles can be classified into four groups: general, distributional, stabilisation and other impacts. Most of the literature criticised the ongoing system of direct payments and their effectiveness in producing income-related policy goals. We believe that our results can be useful for researchers and policymakers in better understanding the income-related impacts of direct payments.
Journal of Economic Literature (JEL) classification: Q18
Bonfiglio, A., Camaioni, B., Coderoni, S., Esposti, R., Pagliacci, F. and F. Sotte (2016). “Where does EU money eventually go? The distribution of CAP expenditure across the European space.” Empirica 43(4): 693-727. https://doi.org/10.1007/s10663-016-9354-2
Boysen, O., Miller, A.C. and A. Matthews (2016). “Economic and Household Impacts of Projected Policy Changes for the Irish Agri-food Sector.” Journal of Agricultural Economics 67(1): 105-129. https://doi.org/10.1111/1477-9552.12119
Chatellier, V. (2004). “The new CAP reform and direct subsidies to the French farms specialized in field crops: Single payment, regionalization and modulation.” OCL - Oleagineux Corps Gras Lipides 11(4-5): 309-317. https://doi.org/10.1051/ocl.2004.0309
Ciaian, P., Kancs, d’A. and S. Gomez y Paloma (2015). “Income distributional effects of CAP subsidies: Micro evidence from the EU.” Outlook on Agriculture 44(1): 19-28. https://doi.org/10.5367/oa.2015.0196
Ciliberti, S. and A. Frascarelli (2018). “The CAP 2013 reform of direct payments: redistributive effects and impacts on farm income concentration in Italy.” Agricultural and Food Economics 6(1). https://doi.org/10.1186/s40100-018-0113-5
Deppermann, A., Offermann, F. and H. Grethe (2016). “Redistributive effects of CAP liberalisation: From the sectoral level to the single farm.” Journal of Policy Modeling 38(1): 26-43. https://doi.org/10.1016/j.jpolmod.2015.11.002
Erjavec, E., Chantreuil, F., Hanrahan, K., Donnellan, T., Salputra, G., Kozar, M. and M. van Leeuwen (2011). “Policy assessment of an EU wide flat area CAP payments system.” Economic Modelling 28(4): 1550-1558. https://doi.org/10.1016/j.econmod.2011.02.007
Fragoso, R., Marques, C., Lucas, M.R., Martins, M.B. and R. Jorge (2011). “The economic effects of common agricultural policy on Mediterranean montado/dehesa ecosystem.” Journal of Policy Modeling 33(2): 311-327. https://doi.org/10.1016/j.jpolmod.2010.12.007
Galluzzo, N. (2018a). “Impact of the Common Agricultural Policy payments towards Romanian farms.” Bulgarian Journal of Agricultural Science 24(2): 199-205.
Galluzzo, N. (2018b). “Role of financial subsidies allocated by the Common Agricultural Policy towards Irish farms.” Journal of Central European Agriculture 19(3): 710-728. https://doi.org/10.5513/JCEA01/19.3.2241
Gelan, A. and G. Schwarz (2008). “The effect of single farm payments on less favoured areas of agriculture in Scotland: a CGE analysis.” Agricultural and Food Science 17(1): 3-17. https://doi.org/10.2137/145960608784182317
Gocht, A., Britz, W., Ciaian, P. and S. Gomez y Paloma (2013). “Farm Type Effects of an EU-wide Direct Payment Harmonisation.” Journal of Agricultural Economics 64(1): 1-32. https://doi.org/10.1111/1477-9552.12005
Hansen, H. and F. Offermann (2016). “Direct Payments in Germany - Income and Distributional Effects of the 2013 CAP Reform.” German Journal of Agricultural Economics 65(2): 77-93.
Judez, L., Chaya, C., Martinez, S. and A.A. Gonzalez (2001). “Effects of the measures envisaged in “Agenda 2000” on arable crop producers and beef and veal producers: an application of Positive Mathematical Programming to representative farms of a Spanish region.” Agricultural Systems 67(2): 121-138. https://doi.org/10.1016/S0308-521X(00)00051-2
Kozar, M., Kavcic, S. and E. Erjavec (2006). “Post-accession income situation of agricultural households in Slovenia under different direct payments policy options.” Journal of Central European Agriculture 7(3): 409-412.
Medonos, T., Jelinek, L. and J. Humpal (2009). “The national and regional impacts of direct payments modulation in the Czech Republic.” Agricultural Economics-Zemedelska Ekonomika 55(4): 200-210. https://doi.org/10.17221/22/2009-AGRICECON
Möllmann, J., Michels, M. and O. Musshoff (2019). “German farmers’ acceptance of subsidized insurance associated with reduced direct payments.” Agricultural Finance Review 79(3): 408-424. https://doi.org/10.1108/AFR-09-2018-0071
Drenková, D., Schwarcz, P. and A. Bandlerova (2009). “Utilisation of the direct EU payments in Slovak agriculture after the 2003 Common Agricultural Policy reform.” Agricultural Economics 55(8): 400-405. https://doi.org/10.17221/2629-AGRICECON
Potori, N., Kovács, M. and V. Vásáry (2013). “The Common Agricultural Policy 2014-2020: an impact assessment of the new system of direct payments in Hungary.” Studies in Agricultural Economics 115(3): 118-123. https://doi.org/10.7896/j.1318
Rancheva, E. and N. Bencheva (2012). “Effects and perspectives of the impact of common agricultural policy/Cap/ on the development of farms in Bulgaria.” Journal of Central European Agriculture 13(3): 527-538. https://doi.org/10.5513/JCEA01/13.3.1084
Rednak, M., Erjavec, E., Volk, T. and M. Kozar (2006a). Income redistribution effects of agricultural policy reforms - The case of Slovenia. Journal of the Austrian Society of Agricultural Economics. 15: 109-118.
Rednak, M., Erjavec, E., Volk, T., Kozar, M. and S. Kavcic (2006b). “Distributional effects of reformed direct payments policy on Slovenian agriculture.” Journal of Central European Agriculture 7(3): 579-582. https://doi.org/10.22004/ag.econ.183759
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Roselli, L., De Gennaro, B., Cimino, O. and U. Medicamento (2009). “The effects of the Health Check of the Common Agricultural Policy on Italian olive tree farming.” New Medit 8(2): 4-13.
Rumanovska, L. (2016). “Impact of EU Common Agricultural Policy 2014-2020 implementation on agriculture in Slovak Republic.” Scientific Papers-Series Management Economic Engineering in Agriculture and Rural Development 16(1): 459-465.
Sahrbacher, C., Sahrbacher, A., Balmann, A., Ostermeyer, A. and F. Schoenau (2012). “Capping Direct Payments in the CAP: Another Paper Tiger? Plafonnement des aides directes: Simple tigre de papier? Kappung der Direktzahlungen: Noch ein Papiertiger?” Eurochoices 11(3): 10-15. https://doi.org/10.1111/1746-692X.12003
Severini, S. and A. Tantari (2013b). “The impact of agricultural policy on farm income concentration: the case of regional implementation of the CAP direct payments in Italy.” Agricultural Economics 44(3): 275-286. https://doi.org/10.1111/agec.12010
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Severini, S., Tantari, A. and G. Di Tommaso (2016). “Do CAP direct payments stabilise farm income? Empirical evidences from a constant sample of Italian farms.” Agricultural and Food Economics 4(1). 1-6. https://doi.org/10.1186/s40100-016-0050-0
Severini, S., Tantari, A. and G. Di Tommaso (2017). “Effect of agricultural policy on income and revenue risks in Italian farms Implications for the use of risk management policies.” Agricultural Finance Review 77(2): 295-311. https://doi.org/10.1108/AFR-07-2016-0067
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Szerletics, Á. (2018). “Degressivity, capping and European farm structure: New evidence from Hungary.” Studies in Agricultural Economics 120(2): 80-86. https://doi.org/10.7896%2Fj.1811
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Viaggi, D., Raggi, M., Gallerani, V. and S. Gomez y Paloma (2010). “The impact of EU common agricultural policy decoupling on farm households: Income vs. investment effects.” Intereconomics 45(3): 188-192. https://doi.org/10.1007/s10272-010-0335-6
Volkov, A., Balezentis, T., Morkunas, M. and D. Streimikiene (2019). “In a search for equity: Do direct payments under the common agricultural policy induce convergence in the European Union?” Sustainability (Switzerland) 11(12). https://doi.org/10.3390/su11123462
Vosough Ahmadi, B., Shrestha, A., Thomson, S.G., Barnes, A.P. and A.W. Scott (2015). “Impacts of greening measures and flat rate regional payments of the Common Agricultural Policy on Scottish beef and sheep farms.” Journal of Agricultural Science 153(4): 676-688. https://doi.org/10.1017/S0021859614001221