Role of financial subsidies allocated by the Common Agricultural Policy towards Irish farms

Abstract

In Ireland, the productive agrarian fabric is characterised by lots of farms predominately specialized in cereals, protein crops and dairy productions with a significant incidence of cows and sheep in zootechnic enterprises. Since 2004 to 2015 a quantitative research has been carried out on Irish farms belonging to the Farm Accountancy Data Network dataset with the purpose to assess the role and impact of financial subsidies allocated by the Common Agricultural Policy (CAP) towards farmer’s income and technical, economic and allocative efficiency as well. The methodology has used the multiple regression model and the Data Envelopment Analysis on a constant return to scale input oriented model. Economic crises have impacted to Irish farms corroborating the theoretical framework according to which decoupled payments allocated by the first pillar of the Common Agricultural Policy have had a more positive and significant impact on farmer’s income and their economic, allocative and cost efficiency than the financial subsidies disbursed by the second pillar of the CAP.