The 2003 Mid-Term Review of the CAP sought to refocus the EU's farm support policy to foster a more competitive and market-orientated agricultural sector. The foundation of this reform comprised the introduction of decoupled payments to farmers, replacing the EU's previous system of supports that were directly linked to production of designated crops and livestock. This paper explores the effect of coupled payments and their subsequent replacement by decoupled support, on the technical efficiency of specialist beef farms in Ireland. Given the high reliance of beef farmers in Ireland on CAP payments, the decoupling of payments has been especially important for the sector. A stochastic production frontier is estimated using a panel dataset comprising detailed accountancy data for Irish beef farms between the years 2000 and 2013. Our results indicate that technical efficiency in the beef farming sector has been consistently poor, with an average efficiency score of only 0.53 during the period analysed. However, we found that direct income received in the form of coupled payments had a positive impact on farm efficiency, and that this positive effect was maintained after their replacement with decoupled income support.

The European Union Common Agricultural Policy reforms since the early 2000s allowed for the implementation of different types of agricultural subsidies, such as direct support in the form of decoupled and coupled payments, or agri‐environmental payments. As a result, there are significant differences in agricultural subsidies granted in each member state of the European Union. However, there is limited cross‐country comparative empirical evidence regarding the effects of the implementation of different levels and types of subsidies on farm efficiency. Using farm level data for beef farms in Ireland, France, Great Britain, and Germany between 2005 and 2012, we implement the stochastic metafrontier proposed by Huang et al. (2014) and attempt to correct for endogeneity applying the method in Shee and Stefanou (2015). Using these approaches, we contribute to the literature by consistently comparing cross‐country farm performance, as well as exploring the disaggregated effects of different types of subsidies on farm level technical efficiency and on the technology gaps. Our estimates show that although beef farms included operate on average close to the global frontier, there is scope to improve farm level managerial performance. However, they do operate close to the global frontier, although not on it. We also find evidence that implementing full decoupling benefited efficiency, whereas implementing partial decoupling might have hindered technical efficiency improvements for beef farms, as well as technology catch up.

No abstract

An empirical profile of SME investment in Ireland is critical to understanding the growth possibilities and productive capacity of Irish indigenous enterprises. However little is known about SME investment activity outside the more aggregate information. This paper uses new survey evidence compiled as part of the Department of Finance SME Credit Demand Survey to profile the types of assets SMEs are investing in, how firms are financing these investments and what barriers firms face to investment. We provide a detailed exploration of the trends across firms looking at different size classes, age groups, exporting status and sectors. A number of findings emerge. We find that two in every three SMEs invested in their staff; one-in-two invested in fixed assets; and less than one-inten invested in intangible assets in 2016. SMEs were in general satisfied with their investment levels or their current capacity with only one-in-five facing a capital gap. For those with perceived insufficient investment, a lack of internal funds, rather than access to external finance, was identified as the main reason. Finally, SMEs reported having significant liquidity levels in 2016. These findings suggest that any perceived sluggishness in borrowing or investment appetite could potentially be demand-side in orientation.

No abstract