A long-term analysis of the common agricultural policy financial subsidies towards Italian farms

Nicola Galluzzo

doi:10.32718/ujvas2-1.03

Abstract

In Italy since 2000 there has been a significant decrease of farms and a notable increase of the usable agricultural areas. In order to reduce the socioeconomic marginalization in rural territories the European Union has supported financially the rural development in a pattern of pluriactivity and productive diversification in farms. The core purpose of this research was to assess by a multiple regression model the impact of financial subsidies allocated by the Common Agricultural Policy on the farmer net income since 2004 to 2016 in Italian farms belonging to the Farm Accountancy Data Network. Findings have pointed out a direct impact of financial supports disbursed by the European Union; by contrast, no impacts have had payments disbursed by the second pillar. Drawing the conclusions, it is fundamental to increase the financial supports of the Common Agricultural Policy aimed at implementing the land capital endowment which is the one of the main bottlenecks in Italian farms.

Highlights

IntroductionSpeaking the role of financial supports allocated in particular by the first pillar of the Common Agricultural Policy (CAP) decoupled by the level of production in farms and by the second pillar of the CAP, aimed at getting better the rural development in the countryside, have had an impact in some European agrarian enterprises and in their competitiveness (Zhu & Lansink, 2010)
Comparing findings of the two Italian Agricultural censuses carried out in 2000 and in 2010 by the National Institute of Statistics (ISTAT) and analysing the results assessed by secondary sources of data in Italy there has been a significant decrease of farms with negative consequences on the socioeconomic development in rural areas
Research findings in the Farm Accountancy Data Network made by all Italian farms since 2004 to 2016 have pointed out as the average amount of land capital in terms of usable agricultural areas (UAA) is close to 18 hectares with notable fluctuations between 3 to 53 hectares (Table 1) which depend upon the specialization of farms in many times characterised by grassland and meadows that act in arising the usable agricultural surface

Summary

Introduction

Speaking the role of financial supports allocated in particular by the first pillar of the Common Agricultural Policy (CAP) decoupled by the level of production in farms and by the second pillar of the CAP, aimed at getting better the rural development in the countryside, have had an impact in some European agrarian enterprises and in their competitiveness (Zhu & Lansink, 2010). These authors have argued the notable effect of the Common Agricultural Policy financial subsidies to the efficiency of farms. Findings on the assessment of the new reform in the agrarian policy in the European Union during the seven-year time 2014–2020 have pointed out as it has been not easy for Italian farms to accept the recent changes and challenges of the new support initiatives financed by the Common Agricultur-

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