"Who Benefits from the CAP?"

Zanias, George P. (2005) "Who Benefits from the CAP?". In: UNSPECIFIED, Austin, Texas. (Unpublished)

Preview

PDF Download (660Kb) | Preview

Abstract

[Introduction]. The Common Agricultural Policy (CAP) constitutes a major public intervention in the European Union (EU) which generates large redistributive effects. Significant resources are being transferred among producers and consumers of agricultural products and the taxpayers. The geographic distribution of these three groups (producers, consumers, taxpayers) in the different member states generates also transfers among the member states. The distribution of benefits and losses under the CAP has attracted the interest of researchers in the past. During the 1980s, Buckwell et al (1982) and Brown (1989) dealt with this issue, when the rules of the ‘traditional’ CAP were very much in place. In the 1990s, Ackrill, Hine, Rayner and Suardi (1997) obtained estimates of the impact of the 1992 CAP reform on the existing distribution of benefits and losses. However, their analysis is ex ante in nature and it concentrates on the most important products included in the 1992 reform of the CAP, excluding the mediterranean products. Tarditi and Zanias (1997 and 2000) do include the mediterranean products and obtain ex post results up to 1995 for the EU regions. Zanias (2002) includes the mediterranean products, produces results at national levels up to 1999 and simulates the potential impact of a partial re-nationalisation of the CAP. Renewed interest for the issue exists for three reasons: 1) Negotiations currently take place in the EU about the 2007-2013 financial framework and the initial positions of the large budget contributors call for a reduction in the EU own resources, which is opposed by some other member states. Since the financing of the CAP attracts nearly half of the EU budget, the distribution of the CAP benefits has important implications for these negotiations. 2) Three major reforms of the CAP have taken place (1992, 1999, 2003), which have changed the philosophy of the CAP, moving away from price intervention and towards direct subsidies to the farmers and rural development measures. Yet the distribution results so far stop in 1999 and a need for more recent results exists. 3) It is useful to have a benchmarking of the distribution of benefits before the implementation of the latest CAP reform (2003) and the gradual application of the CAP to the new member states. This study extends the results of Zanias (2002) regarding the distribution of benefits among member states covering the period 1988-2003, and focuses on the "anatomy" of the generated transfers and their determinants.

Actions (login required)