On the Characterisation and Measurement of the Redistributive Effect of Agricultural Policy

Abstract

The article proposes a coherent framework for the evaluation of the redistributive performance of agricultural policy. An illustrative study shows that the vertical stance of policy in Scotland was progressive in absolute terms, reflecting the chronic dependence of Scottish agriculture on policy transfers. Nevertheless, the overall redistributive effect of policy was to increase absolute inequality in farm incomes because of horizontal inequities in the incidence of transfers, though neither systematic discrimination between farm types nor systematic reranking was the main cause. The targeting of policy transfers could be improved by the use of indicator variables more strongly correlated with pre-transfer incomes. Copyright 2007 The Author. Journal compilation 2007 The Agricultural Economics Society.

Marginal Analysis of Income Mobility Effects by Income Source with an Application to the Agricultural Policy Mix

“…This note makes novel use of a decomposition of the Shorrocks index by income components to show that a revenue‐neutral change in the balance between market‐based support and direct payments would not have reduced the variability of relative incomes in Scottish agriculture. It also adds to the existing literature on the redistributive impact of agricultural support policy, which focuses on the effects on annual income inequality (Keeney, ; Allanson, ; Deppermann et al ., ). In particular, higher overall levels of support would probably have reduced income mobility and thereby the degree of inequality in the short term compared to the longer term.…”

Redistributive effects of CAP liberalisation: From the sectoral level to the single farm

“…Absolute Gini and concentration indices can be obtained by multiplication of the relative indices by average sample incomes. In absolute terms the overall effect of redistribution can be decomposed in a similar way like the relative index above (Allanson, 2008):…”

The CAP and its Reform – Half a Century of Change? Die GAP und ihre Reform – 50 Jahre im Wandel? La PAC et sa réforme – Un demi‐siècle de changement?

“…Overall, the CAP still does not emphasise individual income needs when determining policy disbursements (see also Allanson, 2008). Indeed, with such a paucity of data, this is not surprising -even though income needs have been the primary justification for CAP transfers for most of the last fifty years.…”