CAP Direct Payments and Economic Resilience of Agriculture: Impact Assessment
Abstract
:1. Introduction
2. Theoretical Background
2.1. Resilience Concept and Its Measurement
2.2. Economic Resilience of Agriculture and CAP Direct Payments
- → The production of food and other bio-based resources at affordable prices;
- → The assurance of farm viability;
- → The creation and maintenance of decent jobs.
3. Methods
4. Data, Results, and Conclusions
4.1. Data
4.2. Results and Discussion
5. Conclusions and Policy Implications
Author Contributions
Funding
Institutional Review Board Statement
Informed Consent Statement
Data Availability Statement
Conflicts of Interest
Appendix A
Variable | Unit of Measure | Obs. | Mean | Std. Dev. | Min | Max |
---|---|---|---|---|---|---|
Direct Payments | EUR/ha | 401 | 310.46 | 224.08 | 61.58 | 2306.3 |
UAA | Ha | 401 | 75.61 | 100.63 | 2.56 | 615.33 |
Agricultural production index | % | 405 | 107.75 | 14.72 | 76.08 | 150.92 |
Crop output share in total output | % | 401 | 0.52 | 0.14 | 0.11 | 0.75 |
Output per ha | EUR/ha | 401 | 2794.9 | 3148.7 | 484.53 | 15.739 |
Global food price | Index, % | 405 | 100.14 | 11.22 | 76.8 | 118.8 |
Prices of means of production | Index, % | 398 | 110.45 | 9.06 | 83.68 | 134 |
Food price HICP ratio | % | 405 | 0.99 | 0.04 | 0.83 | 1.16 |
Net profit margin | % | 401 | 0.21 | 0.12 | −0.22 | 0.5 |
Debt-to-assets ratio | % | 400 | 17.82 | 14.67 | 0.03 | 60.23 |
Ratio of output sell price to the price of means of production | % | 398 | 0.97 | 0.09 | 0.76 | 1.32 |
Expense-to-output ratio | % | 401 | 0.96 | 0.17 | 0.59 | 1.75 |
Fixed capital per worker | EUR/AWU | 401 | 2.6 × 105 | 2.9 × 105 | 9000.8 | 1.32 × 106 |
Total labor input | AWU | 401 | 2.35 | 2.58 | 1.02 | 20.73 |
Salaried employment index | % | 405 | 100.41 | 24.54 | 49.65 | 198.57 |
Labor productivity | EUR/AWU | 405 | 52.26 | 46.73 | 5.18 | 230.99 |
Total specific costs | EUR | 401 | 60,199 | 65,489 | 3453 | 3.32 × 105 |
Wages per AWU | EUR | 401 | 16,301 | 10,060 | 1905 | 44,897 |
Net earnings in a country (total NACE) | EUR | 391 | 18,887 | 10,764 | 2605.9 | 42,584 |
Labor costs (wages and salaries) | Index, % | 405 | 91.66 | 17.3 | 32.2 | 170.6 |
Total unemployment | % | 405 | 8.46 | 4.29 | 2 | 27.5 |
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Function | Indicators of the Functions | Unit | Type | Source |
---|---|---|---|---|
Delivery of affordable agricultural goods (P) | Ratio of the retail prices of food | % | Cost (−) | EUROSTAT |
to the retail prices of all consumption goods | ||||
Agricultural goods output, index | % | Benefit (+) | EUROSTAT | |
Assurance of farm viability (V) | Net profit margin (including subsidies) | % | Benefit (+) | FADN * |
Expense-to-income ratio | % | Cost (−) | FADN | |
Debt-to-assets ratio | % | Cost (−) | FADN | |
Creation and maintenance of decent jobs (J) | Salaried agricultural labor input, index | % | Benefit (+) | EUROSTAT |
Labor productivity | EUR/AWU | Benefit (+) | EUROSTAT | |
Wages per salaried employees | EUR/AWU | Benefit (+) | FADN |
Dependent Variable: Agricultural Production | Coefficient | Std. Error | p-Value | Significance | |
---|---|---|---|---|---|
Const | β0 | 1.54 | 1.61 | 0.348 | |
ln DPs | β1 | −0.1 | 0.05 | 0.0395 | ** |
ln UAA | β2 | 0.14 | 0.05 | 0.015 | ** |
ln Output per ha | β3 | 0.51 | 0.06 | <0.001 | *** |
Crop output share in total output | β4 | 0.27 | 0.15 | 0.084 | * |
ln Total UAA in a country | β5 | −0.1 | 0.19 | 0.602 |
Dependent Variable: Ratio of Food Prices to Prices of Consumer Goods | Coefficient | Std. Error | p-Value | Significance | |
---|---|---|---|---|---|
const | β0 | −0.19 | 0.14 | 0.166 | |
ln DPs | β1 | −0.03 | 0.02 | 0.065 | * |
Global food price index | β2 | 1.90 × 10−4 | 0 | 0.242 | |
Price index of means of production | β3 | 0.001 | 0 | 0.001 | *** |
ln Labor costs | Β4 | 0.04 | 0.03 | 0.172 | |
ln Total unemployment | Β5 | 0.002 | 0.01 | 0.839 |
Dependent Variable: Net Profit Margin | Coefficient | Std. Error | p-Value | Significance | |
---|---|---|---|---|---|
const | β0 | −0.7 | 0.2 | 0.002 | *** |
ln DPs | β1 | 0.08 | 0.03 | 0.017 | ** |
Ratio of output sell price to the price of means of production | β2 | 0.38 | 0.06 | <0.001 | *** |
ln UAA | β3 | 0.004 | 0.04 | 0.918 | |
Crop output share in total output | β4 | 0.2 | 0.06 | 0.004 | *** |
Debt to assets ratio (lag 1) | β5 | −0.002 | 0.01 | 0.22 |
Dependent Variable: Expense-to-Output Ratio | RE Model | FE Model | ||||||
---|---|---|---|---|---|---|---|---|
Coefficient | Std. Error | p-Value | Significance | Coefficient | p-Value | Significance | ||
Const | β0 | 0.25 | 0.24 | 0.293 | 0.07 | 0.796 | ||
ln DPs | β1 | 0.07 | 0.03 | 0.023 | ** | 0.07 | 0.045 | ** |
Ratio of output selling price to the price of means of production | β2 | −0.34 | 0.08 | <0.001 | *** | −0.35 | <0.001 | *** |
Crop output share in total output | β3 | −0.36 | 0.1 | <0.001 | *** | −0.34 | 0.002 | *** |
Debt-to-assets ratio | β4 | 0.003 | 0.003 | 0.331 | 0.002 | 0.528 | ||
ln Total labor input | β5 | −0.22 | 0.1 | 0.028 | ** | −0.21 | 0.057 | * |
squared ln Total labor input | β6 | 0.09 | 0.03 | <0.001 | *** | 0.09 | 0.007 | *** |
ln average fixed capital per worker | β7 | −0.05 | 0.02 | 0.007 | *** | |||
ln average UAA | β8 | 0.1 | 0.03 | 0.003 | *** | |||
Observations: 394. Robust (HAC) standard errors | R2 = 0.55 | R2 = 0.37 |
Dependent Variable: Debt-to-Assets Ratio | Coefficient | Std. Error | p-Value | Significance | |
---|---|---|---|---|---|
Const | β0 | −21.39 | 20.97 | 0.308 | |
Debt to assets ratio (lag 1) | β1 | 0.93 | 0.12 | <0.001 | *** |
ln DPs | β2 | 2.72 | 2.85 | 0.339 | |
Net profit margin (lag 1) | β3 | −3.88 | 9.25 | 0.675 | |
Crop output share in total output | β4 | 10.55 | 8.54 | 0.217 | |
ln UAA (lag 1) | β5 | 1.95 | 1.55 | 0.209 |
Dependent Variable: Salaried Employment | Coefficient | Std. Error | p-Value | Significance | |
---|---|---|---|---|---|
const | β0 | 5.5 | 0.49 | <0.001 | *** |
ln DPs | β1 | −0.16 | 0.06 | 0.007 | *** |
ln UAA | β2 | −0.05 | 0.09 | 0.574 | |
ln Labor productivity | β3 | −0.02 | 0.05 | 0.681 | |
Crop output share in total output | β4 | 0.004 | 0.18 | 0.981 | |
ln Labor costs | β5 | 0.04 | 0.05 | 0.427 |
Dependent Variable: Labor Productivity | RE Model | FE Model | ||||||
---|---|---|---|---|---|---|---|---|
Coefficient | Std. Error | p-Value | Significance | Coefficient | p-Value | Significance | ||
Const | β0 | −7.27 | 1.21 | <0.001 | *** | −2.33 | 0.003 | *** |
ln DPs | β1 | 0.31 | 0.06 | <0.001 | *** | 0.31 | <0.001 | *** |
ln Total specific costs | β2 | 0.13 | 0.06 | 0.023 | ** | 0.11 | 0.089 | * |
Crop output share in total output | β3 | 0.59 | 0.29 | 0.042 | ** | 0.6 | 0.043 | ** |
ln UAA | β4 | −0.25 | 0.19 | 0.187 | 0.08 | 0.61 | ||
ln Fixed capital per worker | β5 | 0.2 | 0.07 | 0.004 | *** | 0.21 | 0.008 | *** |
ln Average fixed capital per worker | β6 | 0.37 | 0.08 | <0.001 | *** | |||
ln Average UAA | β7 | 0.12 | 0.14 | 0.396 | ||||
Average Crop output share in total output | β8 | 0.05 | 0.8 | 0.954 | ||||
Observations: 401 Robust (HAC) standard errors | R2 = 0.83 | R2 = 0.72 |
Dependent Variable: Wages | Coefficient | Std. Error | p-Value | Significance | |
---|---|---|---|---|---|
Const | β0 | 2.86 | 0.86 | 0.003 | *** |
ln DPs | β1 | 0.03 | 0.05 | 0.584 | |
ln Net earnings in a country (total NACE) | β2 | 0.53 | 0.11 | <0.001 | *** |
ln Labor productivity | β3 | 0.12 | 0.06 | 0.047 | ** |
ln Total unemployment | β4 | −0.01 | 0.02 | 0.469 |
Function | Average Score | St. Dev. | Local Weights | Global Weights | ||
---|---|---|---|---|---|---|
Agricultural Functions | ||||||
Production of affordable food and other bio-based resources (P) | 4.89 | 0.33 | ω1 | 0.4 | ||
Assurance of farm viability (V) | 4 | 1 | ω2 | 0.32 | ||
Creation and maintenance of decent jobs (E) | 3.44 | 0.73 | ω3 | 0.28 | ||
Indicators | ||||||
Agricultural goods output | 4.44 | 0.53 | 0.49 | 0.19 | ||
Ratio of the retail prices of food | 4.67 | 0.5 | 0.51 | 0.2 | ||
to the retail prices of all consumption goods (–) | ||||||
Farm Profitability (subsidies included) | 4 | 1.32 | 0.32 | 0.1 | ||
Farm efficiency (subsidies excluded) (–) | 4.5 | 0.76 | 0.36 | 0.12 | ||
Farm Solvency (–) | 4 | 0.5 | 0.32 | 0.1 | ||
Salaried employment | 3.11 | 0.93 | 0.26 | 0.07 | ||
Labor productivity | 4.22 | 0.97 | 0.36 | 0.1 | ||
Wages for agricultural employees | 4.56 | 0.53 | 0.38 | 0.11 |
Index/Subindices | Key Function | Value |
---|---|---|
DPII | 0.37% | |
DPIIproduction | Delivery of affordable food and other bio-based resources | −0.34% |
DPIIfarm_viabilityn | Assurance of farm viability | 0.97% |
DPIIjobs | Creation and maintenance of decent jobs | 0.68% |
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Žičkienė, A.; Melnikienė, R.; Morkūnas, M.; Volkov, A. CAP Direct Payments and Economic Resilience of Agriculture: Impact Assessment. Sustainability 2022, 14, 10546. https://doi.org/10.3390/su141710546
Žičkienė A, Melnikienė R, Morkūnas M, Volkov A. CAP Direct Payments and Economic Resilience of Agriculture: Impact Assessment. Sustainability. 2022; 14(17):10546. https://doi.org/10.3390/su141710546
Chicago/Turabian StyleŽičkienė, Agnė, Rasa Melnikienė, Mangirdas Morkūnas, and Artiom Volkov. 2022. "CAP Direct Payments and Economic Resilience of Agriculture: Impact Assessment" Sustainability 14, no. 17: 10546. https://doi.org/10.3390/su141710546
APA StyleŽičkienė, A., Melnikienė, R., Morkūnas, M., & Volkov, A. (2022). CAP Direct Payments and Economic Resilience of Agriculture: Impact Assessment. Sustainability, 14(17), 10546. https://doi.org/10.3390/su141710546