Will the EU Single Area Payment decrease farm efficiency in the New Member States?
2009
Douarin, Elodie | Latruffe, Laure
This paper starts the debate regarding the likely impact of post-accession public support in the New Member States on their farming sector’s efficiency. While one aim of farm support in the European Union (EU) is to promote efficient farms that can compete internationally, a higher level of support via the Single Area Payment (SAP) may have adverse effects on farms’ performance. Analyses using pre-accession technical efficiency scores calculated with Data Envelopment Analysis (DEA) and post-accession farmer’s intentions, lead to the conclusion that the implementation of the SAP may decrease farm efficiency. The main reasons are the negative link between farm efficiency and subsidies already present in pre-EU accession Lithuania, and the change in incentives given to less efficient farms by the introduction of SAP.
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