Direct payments and costs of agricultural production in the European Union countries

Distribution of direct payments within the first pillar of Common Agricultural Policy is unequal in the European Union and depends on historical criteria which have no economic justification. Apart from slight modifications suggested by the European Commission, the mechanism of distribution of direc...

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Bibliographic Details
Published in:Journal of agribusiness and rural development 2013-03, Vol.1 (27), p.33-43
Main Authors: Aleksandra Chlebicka, Radosław Lewandowski-Lepak
Format: Article
Language:English
Subjects:
common agriculture policy
direct payments
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Summary:Distribution of direct payments within the first pillar of Common Agricultural Policy is unequal in the European Union and depends on historical criteria which have no economic justification. Apart from slight modifications suggested by the European Commission, the mechanism of distribution of direct payments among EU countries is going to be maintained in the coming financial perspective for 2014-2020. The aim of the article was to discuss relations between the level of direct payments and the costs of agricultural production. There is a positive correlation between these two variables (in euro per ha). However, the level of variation of relation payments vs costs (different categories) is high. It proves that, first of all, the level of payments received by farmers does not reflect costs. Secondly, the existing differences in payments per ha in different countries can not be explained by different cost levels.
ISSN:1899-5241
1899-5772