The Effects of the Reformed CAP on the Local Economy in Rural Areas

Abstract

The impacts of the 2004 CAP reform on crop allocation, agricultural production, and the rural economy have been scarcely studied within a regional perspective. In this work, the impact of the CAP reform—and in particular the implementation of cross-compliance—on the region of Eastern Macedonia and Thrace (Greece) is studied with the use of factor analysis and structural equation modeling. Detailed qualitative and quantitative data were obtained through structured questionnaires and in-depth interviews of agronomists working in the local agricultural inputs sector. Results demonstrate that the CAP reform had primarily an adverse impact on both crop allocation and production, as well as on the local economy.