New perspectives on the distribution of farm incomes and the redistributive impact of CAP payments

Abstract

Abstract We contribute to understanding the impact of potential drivers of farm income inequality and the redistributive impact of Common Agricultural Policy (CAP) payments. Our approach provides information at any quantile of the income distribution, in contrast to the widely used Gini coefficient. Income growth and inequality dynamics of French commercial farms between 2000 and 2017 are found to be explained by a change in both income levels and farm characteristics. Further, CAP payments are shown to participate in levelling off income inequalities, with Pillar 1 and 2 payments performing differently along the distribution. Our results may help inform on-going policy debates about fairness in the distribution of farm support and structural change implications for the future of European agriculture.