This week, Senior Research Fellow Mauro Vigani has travelled to Brussels to attend the 172nd European Association of Agricultural Economists (EAAE) Seminar. The event, taking place at the Museum of Natural Sciences, will focus on policy and research implications of heightened environmental and climate ambitions with regard to the European Commission’s proposals for reform of the Common Agricultural Policy. The EAAE has received support from DG Agri and the Joint Research Centre for the seminar. Full details of the event can be found on the EU Science Hub website.
The seminar aims at bringing together researchers, policy makers and other stakeholders from both the agricultural and environmental economics disciplines. Together we expect to take a fresh look at the economics-policy nexus of agriculture and the environmentin the context of the CAP post-2020. The seminarintends to promote discussions oncurrent and future aspectsof the CAP to enhance the understanding ofopportunities and limits of its environmental and climate ambition.The focus will be on analysing the policy design and impact of agro-environmental and climate-friendly practices.With a strong emphasis on policy application, theseminar intentsto provide a platformto foster direct discussions between academia and policymakers in order to identify areas of policy action and further research needs. The agenda for the seminar can be viewed here.
Mauro will be presenting a co-authored paper in an afternoon session on 29th May. Written with Daniele Curzi from the University of Milan, the paper entitled ‘Productivity impact of CAP Pillar II payments in the EU28’, concerns the impact of rural development subsidies on farm productivity. The paper’s abstract can be found at the end of this article.
To accompany the seminar, the EuroChoices journal have published a special edition. This can be accessed via the vollowing link and is entitled ‘Agricultural Policy for the Environment or Environmental Policy for Agriculture?’
Productivity impact of CAP Pillar II payments in the EU28
The productivity impacts of the CAP payments, and especially of the Rural Development measures, are still uncertain and mixed effects from a diversity of empirical approaches have been found in the literature. This paper analyses the effects of the CAP on the productivity of the farms in the EU28 by adopting an alternative approach based on a system of equations derived from a non-nested production function with constant elasticity of substitution. The econometric strategy consists of a simultaneous equation model with GMM estimator which allows dealing with potential endogeneity bias. Results show that the majority of Pillar I and II payments have a positive impact on the productivity of the farming sector, with the noticeable exceptions of agro-environmental schemes and other rural development subsidies. However, the productivity impact of CAP payments is sensitive to the composition of the sample and it is different for different groups of Member States.