Inderscience Publishers

Efficiency grounds and welfare effects in decoupling farm support. Insights from an AGE model of the Italian economy

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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.

Keywords: 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

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