A longitudinal and cross-sectional analysis of the distribution of Common Agricultural Policy aids in European countries

Abstract

The primary sector plays a key role in any country, from both economic and social perspectives, as has been underscored by the ongoing COVID-19 pandemic. In Europe, this sector is highly dependent on the aid provided under the Common Agricultural Policy (CAP). Therefore, the distribution of this aid among the various recipients is crucial to maintaining a strong primary sector throughout the European Union (EU). This is especially true in light of the new funding for the period from 2021 to 2027 and the United Kingdom's departure from the EU. In this sense, the 93.5% of the first pillar of CAP aid consists of direct aid to farmers. The related literature has shown its effect on aspects such as sustainability and farmers' income, among others, and its distribution in specific geographical areas. In this vein, the present paper conducts a longitudinal and cross-sectional analysis of the distribution of aid across EU countries. The results show that the CAP reforms and the incorporation of countries into the EU influenced the distribution of aid. Moreover, there is a clear division between Eastern and Western EU countries, with a more equitable distribution of aid in the West.