Disinvestment, farm size, and gradual farm exit: The impact of subsidy decoupling in a European context

Andrius Kazukauskas; Carol Newman; Daragh Clancy; Johannes Sauer

doi:10.1093/ajae/aat048

Disinvestment, farm size, and gradual farm exit: The impact of subsidy decoupling in a European context

Andrius Kazukauskas
, Carol Newman
, Daragh Clancy
, Johannes Sauer

Umeå University
Trinity College Dublin
Central Bank of Ireland
Christian-Albrechts-University of Kiel

Research output: Contribution to journal › Article › peer-review

49 Scopus citations

Abstract

The recent reformofthe CommonAgricultural Policy,which decouples farm subsidies from production, is expectedtoimpactonfarmers' production decisions.Weperformacross-country farm-level empirical analysis of farmers' production responses to these reforms using a panel dataset for the EU15 countries for the period 2001-2007.We apply quasi-experimental empirical methods and find that the probability of a farm disinvesting decreased due to the policy change for most farms. However, the policy change facilitated exit for farms engaged in livestock production and those that were already in the process of leaving the sector.

Original language	English
Pages (from-to)	1068-1087
Number of pages	20
Journal	American Journal of Agricultural Economics
Volume	95
Issue number	5
DOIs	https://doi.org/10.1093/ajae/aat048
State	Published - Oct 2013
Externally published	Yes

Keywords

Difference-in-differences
Disinvestment
Farm exit
Farmland reduction
Subsidy decoupling

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10.1093/ajae/aat048

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title = "Disinvestment, farm size, and gradual farm exit: The impact of subsidy decoupling in a European context",

abstract = "The recent reformofthe CommonAgricultural Policy,which decouples farm subsidies from production, is expectedtoimpactonfarmers' production decisions.Weperformacross-country farm-level empirical analysis of farmers' production responses to these reforms using a panel dataset for the EU15 countries for the period 2001-2007.We apply quasi-experimental empirical methods and find that the probability of a farm disinvesting decreased due to the policy change for most farms. However, the policy change facilitated exit for farms engaged in livestock production and those that were already in the process of leaving the sector.",

keywords = "Difference-in-differences, Disinvestment, Farm exit, Farmland reduction, Subsidy decoupling",

author = "Andrius Kazukauskas and Carol Newman and Daragh Clancy and Johannes Sauer",

note = "Funding Information: Dr. Andrius Kazukauskas is at the School of Business and Economics, Ume{\aa} University, Sweden. Prof. Carol Newman is at the Department of Economics, and Institute for International Integration Studies, Trinity College Dublin, Ireland. Dr. Daragh Clancy is at the Central Bank of Ireland, Dame Street, Dublin 2, Ireland. Prof. Johannes Sauer is at the Institute for Agricultural Economics, University of Kiel Olshausenstrasse 40, 24098 Kiel, Germany. This study was funded under the Research Stimulus Fund 2007 of the Irish Department of Agriculture and Food, whose support is gratefully acknowledged. The authors thank Christoph R. Weiss, Fiona Thorne, David A. Hennessy, two anonymous referees and others for their valuable comments on earlier drafts of this article. We also thank DG Agriculture (European Commission) for providing us with the data.",

year = "2013",

month = oct,

doi = "10.1093/ajae/aat048",

language = "English",

volume = "95",

pages = "1068--1087",

journal = "American Journal of Agricultural Economics",

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T2 - The impact of subsidy decoupling in a European context

AU - Kazukauskas, Andrius

AU - Newman, Carol

AU - Clancy, Daragh

AU - Sauer, Johannes

N1 - Funding Information: Dr. Andrius Kazukauskas is at the School of Business and Economics, Umeå University, Sweden. Prof. Carol Newman is at the Department of Economics, and Institute for International Integration Studies, Trinity College Dublin, Ireland. Dr. Daragh Clancy is at the Central Bank of Ireland, Dame Street, Dublin 2, Ireland. Prof. Johannes Sauer is at the Institute for Agricultural Economics, University of Kiel Olshausenstrasse 40, 24098 Kiel, Germany. This study was funded under the Research Stimulus Fund 2007 of the Irish Department of Agriculture and Food, whose support is gratefully acknowledged. The authors thank Christoph R. Weiss, Fiona Thorne, David A. Hennessy, two anonymous referees and others for their valuable comments on earlier drafts of this article. We also thank DG Agriculture (European Commission) for providing us with the data.

PY - 2013/10

Y1 - 2013/10

N2 - The recent reformofthe CommonAgricultural Policy,which decouples farm subsidies from production, is expectedtoimpactonfarmers' production decisions.Weperformacross-country farm-level empirical analysis of farmers' production responses to these reforms using a panel dataset for the EU15 countries for the period 2001-2007.We apply quasi-experimental empirical methods and find that the probability of a farm disinvesting decreased due to the policy change for most farms. However, the policy change facilitated exit for farms engaged in livestock production and those that were already in the process of leaving the sector.

AB - The recent reformofthe CommonAgricultural Policy,which decouples farm subsidies from production, is expectedtoimpactonfarmers' production decisions.Weperformacross-country farm-level empirical analysis of farmers' production responses to these reforms using a panel dataset for the EU15 countries for the period 2001-2007.We apply quasi-experimental empirical methods and find that the probability of a farm disinvesting decreased due to the policy change for most farms. However, the policy change facilitated exit for farms engaged in livestock production and those that were already in the process of leaving the sector.

KW - Difference-in-differences

KW - Disinvestment

KW - Farm exit

KW - Farmland reduction

KW - Subsidy decoupling

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DO - 10.1093/ajae/aat048

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SN - 0002-9092

VL - 95

SP - 1068

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JO - American Journal of Agricultural Economics

JF - American Journal of Agricultural Economics

IS - 5

ER -

Disinvestment, farm size, and gradual farm exit: The impact of subsidy decoupling in a European context

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Keywords

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