Regional Differences in Benefits from the EU Common Agricultural Policy in Poland and Their Policy Implications

Ewa Kiryluk-Dryjska,Agnieszka Baer-Nawrocka

doi:10.3390/agriculture11040288

Ewa Kiryluk-Dryjska, Agnieszka Baer-Nawrocka

Open Access

https://doi.org/10.3390/agriculture11040288

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Journal: Agriculture	Publication Date: Mar 27, 2021
Citations: 7	License type: CC BY 4.0

Affiliation: University of Life Sciences in Poznań

Abstract

Although the beneficial impact of Common Agricultural Policy (CAP) on the stabilization on farming income is undisputable, the distribution of benefits derived from the CAP between operators and regions gives rise to some controversy. The objective of this paper was to estimate regional differences in the benefits derived from the Common Agricultural Policy in Poland based on the partial equilibrium model of the European Union (EU) agricultural sector with simulated interventions. The expectations of farmers from different regions of Poland were represented as a non-cooperative game to define vectors of change in the agricultural policy. The theory of moves was applied to set the game between different groups of farmers. Our results demonstrate that both the 1st and the 2nd pillars of the CAP were more profitable to farmers from regions with a more advantageous agrarian structure and a higher agricultural potential compared to their peers from the regions with a fragmented agriculture. However, considering long-term development objectives of the Polish agriculture, the theory of moves outcome argues against compensating for these differences by increasing redistributive payments to farmers in less favorable regions. To prevent widening of regional differences and ensure the social and economic development of rural areas in regions with less favorable agrarian structures where agriculture is currently unable to compete, it would be critical to enhance conditions for alternative types of economic activities.

Highlights

Supporting the incomes of agricultural producers is among the key goals of the European Union’s (EU) Common Agricultural Policy (CAP)
The preference system of the game theory used in this paper is based on the results provided by the CAPRI partial equilibrium model
The results are calculated by the CAPRI model as described in the method part of the paper

Summary

Introduction

Supporting the incomes of agricultural producers is among the key goals of the European Union’s (EU) Common Agricultural Policy (CAP). Market intervention measures taken under the first pillar are of minor importance. They boil down to what is referred to as the safety net, which means that they are put in place only in emergency situations or if the market is severely affected by a disturbance. In order to ensure effective support for farmers in a way aligned with national conditions, member states can combine different schemes of direct payments. Some of these schemes are mandatory while others are optional.

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