Assessing the redistributive impact of the 2013 CAP reforms: an EU-wide panel study

Abstract

Abstract This paper analyses the effects of the 2013 Common Agricultural Policy reforms on the distribution of direct payments across the European Union (EU) member states. The differential implementation of two key redistributive policies across countries from 2014 onwards enables the use of a generalised difference-in-differences strategy to estimate their distributional effects. Using data on EU-wide direct payment recipients reveals a substantial negative impact on the largest payment recipients and significant redistribution towards smaller farmers. A disaggregated analysis suggests that of the two instruments, capping, though still an attractive option for policymakers, is less effective at redistributing subsidies towards smaller farmers than the Redistributive Payment Scheme.