Searching for more balanced distribution of direct payments among agricultural farms in the CAP post-2020

Grochowska R., Pawłowska A., Skarżyńska A. (2021): Searching for more balanced distribution of direct payments among agricultural farms in the CAP post-2020. Agric. Econ. – Czech, 67: 181–188.

download PDF

The study aimed to examine the changes in income inequalities in Polish farms and the impact of introducing the threshold of direct payments for farms (EUR 60 000) to form these inequalities. The research was based on data from the Farm Accountancy Data Network (FADN) for the years: 2006, 2013 and 2018. In each year, the sample included at least 10 000 observations that represented over 700 000 farms. The results were verified using statistical tests relating to the comparisons of averages and distributions of farm income for two samples and the Gini coefficient. The study noted deepening income inequalities in Polish farms, as evidenced by the increasing value of the Gini coefficient in the subsequent years and the growing share of payments in the formation of these inequalities. Neither for the sample analysed nor the field of observation of farms will introduce the threshold for direct payments per farm of at least EUR 60 000 (including labour costs) change the polarisation of income.

Banerjee A.V., Duflo E. (2003): Inequality and growth: What can the data say? Journal of Economic Growth, 8: 267–299.
Brewer M., Wren-Lewis L. (2016): Accounting for changes in income inequality: Decomposition analyses for the UK, 1978–2008. Oxford Bulletin of Economics and Statistics, 78: 289–322.
Ciaian P., Kancs d'A., Espinosa M. (2017): The impact of the 2013 CAP reform on the decoupled payments' capitalisation into land values. Journal of Agricultural Economics, 69: 306–337.
Ciliberti S., Frascarelli A. (2018): The CAP 2013 reform of direct payments: Redistributive effects and impacts on farm income concentration in Italy. Agricultural and Food Economics, 6: 1–18.
El Benni N., Finger R. (2012): The effect of agricultural policy reforms on income inequality in Swiss agriculture – An analysis for valley, hill and mountain regions. Journal of Policy Modelling, 35: 638–651.
El Benni N., Finger R., Mann S., Lehmann B. (2012): The distributional effects of agricultural policy reforms in Switzerland. Agricultural Economics – Czech, 58: 497–509.
European Commission (2018a): Direct Payments to Agricultural Producers – Graphs and Figures. Financial Year 2018. Brussels, Belgium, Agricultural and Rural Development: 1–65.
European Commission (2018b): Proposal for a Regulation of the European Parliament and of the Council Establishing Rules on Support for Strategic Plans to Be Drawn Up by Member States under the Common Agricultural Policy (CAP Strategic Plans) and Financed by the European Agricultural Guarantee Fund (EAGF) and by the European Agricultural Fund for Rural Development (EAFRD) and Repealing Regulation (EU) No 1305/2013 of the European Parliament and of the Council and Regulation (EU) No. 1307/2013 of the European Parliament and of the Council, Brussels, 1. 6. 2018, COM(2018) 392 final, 2018/0216(COD).
European Commission (2019): Summary Report on the Implementation of Direct Payments [Except Greening]. Claim Year 2017. Brussels, Belgium, European Commission: 1–28.
FADN (2018): FADN Public Database. [Dataset]. European Commission. Available at (accessed June 10, 2020).
Fields G.S. (2003): Accounting for income inequality and its change: A new method, with application to the distribution of earnings in the United States. In: Polachek S.W. (ed.): Worker Well-Being and Public Policy (Research in Labour Economics). Vol. 22. Bingley, Emerald Group Publishing Limited: 1–38.
Hill B. (2012): Understanding the Common Agricultural Policy. London and New York, Earthscan: 1–335.
Jelínek L., Medonos T., Foltýn I., Humpál J., Boyinová S. (2018): Social and economic consequences of direct payments capping and redistribution on the Czech large-scale farms. In: 162nd EAAE Seminar – The Evaluation of New CAP Instruments: Lessons Learned and the Road Ahead, Corvinus University of Budapest, Budapest, Hungary, Apr 26–27, 2018: 1–15.
Kirwan B., Roberts M. (2015): Who really benefits from agricultural subsidies? Evidence from field-level data. American Journal of Agricultural Economics, 98: 1095–1113.
Mankiw N.G. (2010): Macroeconomics. 7th Ed. New York, USA, Worth Publishers: 1–598.
Matthews A. (2017): The challenges of the next CAP: Doing more with less. Agriregionieuropa, 13. Available at (accessed Feb 4, 2021).
Matthews A. (2018): Why Capping Will Be a Mirage? [Blog post]. CAP Reform Blog. Available at (accessed July, 2020).
Mishra A., El-Osta H., Gillespie J.M. (2009): Effect of agricultural policy on regional income inequality among farm households. Journal of Policy Modelling, 31: 325–340.
Sahrbacher Ch., Sahrbacher A., Balmann A., Ostermeyer A., Schoenau F. (2012): Capping direct payments in the CAP: Another paper tiger? Euro Choices, 11: 10–15.
Severini S., Tantari A. (2015): The distributional impact of agricultural policy tools on Italian farm households incomes. Journal of Policy Modelling, 37: 124–135.
Shorrocks A.F. (1982): Inequality decomposition by factor components. Econometrica, 50: 193–211.
Sinabell F., Schmid E., Hofreither M.F. (2013): Exploring the distribution of direct payments of the common agricultural policy. Empirica, 40: 325–341.
Staniszewski J., Borychowski M. (2020): The impact of the subsidies on efficiency of different sized farms. Case study of the Common Agricultural Policy of the European Union. Agricultural Economics – Czech, 66: 373–380.
Stiglitz J.E. (2009): The global crisis, social protection and jobs. International Labour Review, 148: 1–2.
download PDF

© 2021 Czech Academy of Agricultural Sciences | Prohlášení o přístupnosti