Efficiency grounds and welfare effects in decoupling farm support. Insights from an AGE model of the Italian economy. (7th December 2006)

• Record Type: Journal Article
• Authors: Cavalletti, Barbara; Rocchi, Benedetto
• Is Part Of: International journal of sustainable development. Volume 9:Number 2(2006)
• Page Start: 106
• Page End: 121
• Publication Date: 2006-12-07
• Subjects: applied general equilibrium analysis -- common agricultural policy -- CAP -- efficiency analysis -- farm support schemes -- income redistribution -- SAM-based models -- Italy -- sustainable development -- welfare effects -- social accounting -- simulation -- budget allocation -- welfare improvement -- sustainable management; Sustainable development -- Periodicals; 338.9005
• Languages: English
• ISSNs: 0960-1406

Abstract

This paper investigates both efficiency and redistributive effects of the recent reform of Common Agricultural Policy in Italy. A general equilibrium model has been calibrated on a social accounting matrix of the Italian economy, adapted to represent the distribution of agricultural income between households. In simulation results the decoupling of farm support proves to be a welfare-improving policy. Moreover, this welfare effect is enhanced by redistributing the support towards low-income agricultural households. In terms of possible policy implications, simulation results suggest that redistributive effects in decoupling farm support may be a crucial aspect for the allocation of the EU agricultural budget.