New Study on Farm Viability Published

A new study, released on 1 June by the UK Government Department for Environment, Food and Rural Affairs (Defra) and carried out by the Dutch Agricultural Economics Research Institute, LEI, analyses the differences in levels of farm subsidies in the EU-25 Member States (figures are not included for Romania and Bulgaria) and assesses the possible impacts of their complete removal on farm viability. It considers the nature of the impacts according to farm sector, farm structure as well as the biophysical conditions of different regions.

The conclusions of the report suggest that, ignoring any second order adjustments that might take place in response to such changes, for example changes in rent, prices or farm practices, withdrawing decoupled payments results in a shift from positive to negative incomes for only a small proportion of EU farms overall. However, while 83% of farms continue to have a positive income, only 18% have a family farm income that is positive once the costs of their own labour and assets are taken into account.

These impacts are highly variable both geographically and according to farm type. Farms in parts of France, the UK, Germany, Denmark, Ireland and Sweden and Finland are shown to be affected significantly, whereas farms in Spain, Poland, Italy, Lithuania, Latvia, Belgium and Austria are much less affected by the abolition of decoupled payments. In terms of farm types, although the majority of dairy, mixed and cereal farms continue to have positive incomes even without decoupled payments, a much small proportion (only about 14%) continue to have a positive farm income once own labour and assets are accounted for – this figure rises to 20% for grazing farms and up to 40% for farms that have not traditionally received CAP support, such as the horticulture, wine, and pigs and poultry sectors).

The full report can be downloaded here.

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11 Jun 2010




The Institute for European Environmental Policy coordinates CAP2020. It is an independent not for profit institute which undertakes research in a number of policy areas including agriculture and rural development.