JOINT RESEARCH CENTRE

Farming in the EU

The Common Agricultural Policy (CAP), representing the second largest share of the EU budget, is an evolving policy area. In the two last decades, support to farmers evolved from price support towards direct payment decoupled from production. Further reforms responding to internal and external challenges will be necessary, in particular in the context of the assessment of the multiannual financial framework 2014-2020, against the backdrop of an uncertain macro-economic environment. Continued impact analysis of different policy options is necessary to feed the political debate.

The JRC develops economic modelling tools to answer such requirement for ex-ante impact assessment of new CAP policy options, at aggregate level (impact of policy options on EU markets and income) and at farm level, both concerning the direct impact of policies on farms (income and subsidies distribution, production costs, agricultural structures) and on farmers' behaviours (e.g. investment strategies).

Agricultural Policy Analysis

The Common Agricultural Policy needs to be adapted to the evolution of its wider context. Different policy options imply different impacts on production and markets, which need to be assessed in due time.

EU Farm Economic Analysis

Farmers in the EU are directly affected by the Common Agricultural Policy (CAP). Given the large variety of farmer types in the EU, assessing CAP impact is complex and depends on the different structures in the different regions of the EU.

Impact on farm household behaviour

The Common Agricultural Policy might have an impact on the behaviour of farmers, beyond the direct impact and short term impact on markets, in particular through the investment propensity, particularly important with respect to more efficient and greener technologies and production processes.