Can the CAP payments facilitate the growth of individual farms in the NMS post-EU accession?
2008
Latruffe , Laure (INRA , Rennes (France). UMR 1302 Structures et Marchés Agricoles, Ressources et Territoires) | Davidova , Sophia (University of Kent(Royaume Uni). Kent Business School) | Douarin , Elodie (Imperial College London(Royaume Uni).) | Gorton , Matthew (Newcastle University(Royaume Uni). School of Agriculture, Food and Rural Development)
The impact of the introduction of the EU Single Area Payments (SAP) on farm strategy is investigated for a sample of Lithuanian farms, utilising farm accounting and survey data. The applications of two investment models demonstrate that the credit market in Lithuania was imperfect prior to accession and that some farms were financially constrained. The introduction of the SAP has a significant, positive influence on farmers’ intentions to expand their farm area compared to a baseline scenario of the continuation of pre-accession policy. The switch in policy has a more pronounced effect on farms that were previously credit constrained. While the SAP has been presented as a policy support that is decoupled from production, its introduction will nevertheless have ex post coupled effects, most notably an income multiplier effect on credit constrained farmers.
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