Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/96458 
Year of Publication: 
2007
Series/Report no.: 
Working Paper No. 79/2007
Publisher: 
Humboldt-Universität zu Berlin, Wirtschafts- und Sozialwissenschaften an der Landwirtschaftlich-Gärtnerischen Fakultät, Berlin
Abstract: 
The Common Agricultural Policy (CAP) of the European Union has been in a process of reform since the early 1990s. As a result of reforms, agricultural market regulations have become more liberal and direct payments have been introduced which are to a large extent decoupled from production. In this paper, we analyze the effects of the direct payments to farmers on inequality of profits in German agriculture. For this purpose, we decompose measures of absolute and relative inequality in total farm profits into the partial effects of the direct payments and all other profit determinants. Key results of the analysis are that the system of direct payments under the New CAP accounts for about one third of the observed inequality in family farms and for almost two thirds of inequality in the large incorporated farms.
Subjects: 
Common Agricultural Policy
agricultural subsidies
income distribution
decoupled payments
JEL: 
D31
Q12
Q18
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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