The Effects Of The Distribution Of Agricultural Direct Payments

Abstract

The Common Agricultural Policy (the CAP) is the most important common policy of the European Union, for which reason it traditionally monopolizes a large part of the European Union budget. Without doubt, the aids that farms receive from this policy are the pillar on which it sustains the battered agricultural sectors. Among CAP aid, direct payments are particularly important, in 2008 accounting for about 37% of the total EU budget. The main objective of this paper is to analyse the effects that the distribution of the CAP direct payments have on the agrarian economy. Specifically, we have analysed the equality level in distribution of CAP direct aid in the countries of the European Union using a concentration index. In this way, we have examined the fairness of distribution of CAP direct aid in the agricultural sector.