The role of CAP subsidies in all European Union member states: an analysis of technical inefficiency

Abstract

The purpose of this research was to assess the impact of CAP payments made to farms included in the European FADN dataset between 2004 and 2019 and, considering this financial aid as an environmental variable, identify patterns of inefficiency in EU farming. The study has adopted a twofold quantitative approach, applying both two-stage DEA and Multidirectional Efficiency Analysis. The results reveal significant imbalances between EU member states over the period of investigation, and underline the specific effect that total CAP disbursed subsidies and second pillar CAP support have on technical inefficiency.

Emigration and Common Agricultural Policy in Romanian Rural Areas: An Analysis of Patterns of Inefficiency

“…In fact, results have corroborated the theoretical hypothesis proposed by Sandy in 2005 in using a multidimensional approach in order to face with studies about permanent emigration. The research's findings have underlined as the CAP subsidies are a fundamental tool for the socio-economic development of Romanian regions because of the financial subsidies and payments have had a significant impact to the emigration from the countryside as argued by other studies (Galluzzo, 2021a(Galluzzo, , 2021bMitrică et al, 2022).…”

“…In general, there are two different methodologies aimed at assessing the technical efficiency; one through a parametric or stochastic modelling (SFA) and another by a non-parametric modelling using the Data Envelopment Analysis (DEA) method (Coelli et al, 2005;Galluzzo, 2021aGalluzzo, , 2021bKumbhakar et al, 2015). The DEA had the positive aspect to estimate multiple inputs and multiple outputs without a priori defined functions of production and other specifications in the model (Coelli et al, 2005;Galluzzo, 2021aGalluzzo, , 2021bGalluzzo, , 2021c.…”

“…On the contrary, the impact of financial supports allocated by the second pillar of the CAP to the rural development did not imply any effects in reducing emigration from Romanian countryside. In general, less favored rural areas, characterized by a low level of assets and investments have had the highest level of permanent emigration hence, drawing some conclusions, the Rural Development Plan that every EU country has proposed and stimulated should implement the financial allocation towards rural areas which recently are involved in an intense process of counter-urbanization from urban space (Galluzzo, 2016(Galluzzo, , 2021a(Galluzzo, , 2021b(Galluzzo, , 2021c. In other new member states of the EU such as Slovenia and Hungary CAP subsidies disbursed in the framework of the first pillar have had positive effects on farm employment (Bojnec & Fertő, 2022) and consequently to the permanent emigration from rural areas where Pillar II and investment subsidies have pointed out mixed effects (Garrone et al, 2019;Minviel & Latruffe, 2017).…”