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Disinvestment, Farm Size, and Gradual Farm Exit: The Impact of Subsidy Decoupling in a European Context
Author(s) -
Kazukauskas Andrius,
Newman Carol,
Clancy Daragh,
Sauer Johannes
Publication year - 2013
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.1093/ajae/aat048
Subject(s) - subsidy , disinvestment , production (economics) , context (archaeology) , economics , agricultural policy , agriculture , agricultural economics , panel data , agricultural productivity , common agricultural policy , business , public economics , incentive , economic policy , european union , geography , econometrics , market economy , microeconomics , archaeology
The recent reform of the Common Agricultural Policy, which decouples farm subsidies from production, is expected to impact on farmers' production decisions. We perform a cross‐country farm‐level empirical analysis of farmers' production responses to these reforms using a panel dataset for the EU15 countries for the period 2001–2007. We apply quasi‐experimental empirical methods and find that the probability of a farm disinvesting decreased due to the policy change for most farms. However, the policy change facilitated exit for farms engaged in livestock production and those that were already in the process of leaving the sector.