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European Review of Agricultural Economics Advance Access published online on July 6, 2009
European Review of Agricultural Economics, doi:10.1093/erae/jbp020
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© Oxford University Press and Foundation for the European Review of Agricultural Economics 2009; all rights reserved. For permissions, please email journals.permissions@oxfordjournals.org

The CAP reform between targeting and equity: a structural policy analysis for Italy

Benedetto Rocchi

University of Florence, Italy

Corresponding author: Benedetto Rocchi, Department of Agricultural and Resource Economics, University of Florence, P.le delle Cascine 18, 50144 Florence, Italy. E-mail: benedetto.rocchi{at}unifi.it

Received March 2008; final version received May 2009

A model grounded on a social accounting matrix for Italy, adapted for an analysis of agriculture, is used to assess the distributive impacts of changes to the single payment scheme after the Common Agricultural Policy Health Check. The main goal of the analysis is to bring out how and to what extent the distributive outcomes of support are affected by the structural relations existing among production activity, factor ownership and the distribution of income from farming among households. A particular manipulation, the singular value decomposition, of the matrix of income multipliers is used to highlight the major trade-offs, implicit in the structure of the economy, between the support to different farm types and the impact on incomes of different households groups. The results outline the existence of a structural trade-off between targeting and equity in supporting Italian agriculture through payments to farms and suggest flexibility in the application of reformed payments according to different distributive features of agriculture in member countries.

Keywords: Common Agricultural Policy, social accounting matrix, income distribution, Italy

JEL classification: Q18, D57, D30


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