Abstract
Taking into account the evolution of the Common Agricultural Policy (CAP), it is wondered to what extent the “green” transformation of this policy and the accompanying change in the distribution of direct payments between farms contributed to the elimination of disproportions in agricultural income. The aim of the study was to investigate the changes in the proclaimed concepts related to the development of the EU agricultural sector in terms of their “green” transformation, and to assess the impact of “green” CAP payments on income inequalities between farms. The research was conducted based on the data representative for Polish commercial farms for the years 2004–2019, covering three financial perspectives of the agricultural policy. The methods of counterfactual modelling and assessment of income inequality were used in the study. The analyses showed that the evolution of the CAP priorities, and hence instruments, towards the pro-environmental (or, more broadly, towards sustainability) have so far had a rather negative impact on the income of Polish farms. In its current form, the support dedicated to environmental and climate protection did not fully compensate farmers for income losses resulting from the use of pro-environmental agricultural practices. Moreover, “green” CAP payments did not play a significant role in shaping income inequalities. Therefore, we can conclude that the CAP instruments do not contribute sufficiently to sustainable development (economic, social, and environmental), because they do not support/motivate farmers to change their production standards.
Highlights
IntroductionAlong with its Cohesion Policy, the European Union’s Common Agricultural Policy (CAP) still constitutes a major part (approximately 30%) of the EU budget [1]
Along with its Cohesion Policy, the European Union’s Common Agricultural Policy (CAP) still constitutes a major part of the EU budget [1]
The results of the research on the impact of CAP instruments dedicated to environmental and climate protection on the profitability of farms are presented in Table 4, which shows the value and standard error for the estimation of the average treatment effect on the treated (ATT), together with t-statistic and the corresponding p-value
Summary
Along with its Cohesion Policy, the European Union’s Common Agricultural Policy (CAP) still constitutes a major part (approximately 30%) of the EU budget [1]. Even though further CAP reforms are being implemented, whether under pressure from external factors (e.g., the World Trade Organization, the food crisis of 2007–2008) or internal factors (e.g., subsequent EU enlargements, the eurozone crisis in 2009–2011), only the instruments have changed. There are first-order changes related to minor policy changes or second-order changes, i.e., significant changes, e.g., replacing one instrument with another [2]. Relating to policy-change theory, it can be stated that the reforms introduced within the CAP are determined by a historical way of thinking dominant at the time with respect to the desired functions of agriculture, as well as the forms and objectives of support. The regional model, postulated for years by the European Commission, encountering great reluctance from
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