The Impact of Direct Payments on Agricultural Farms Income

N. Koteva

Abstract: Issues, concerning the impact of direct payments on the agricultural sector and the development of agricultural farms, are multilayered and complex, that is why the research is based specifically on agricultural farms’income. Objective of this article: Based on the analysis, the objective of this article is to make an assessment of the impact of direct payments on agricultural farms’ income by specialization and economic size under the conditions of the Single European Market. The study is based on information from the observed farms, included in the Farm Accountancy Data Network (FADN). Based on the analysis of the impact of direct payments on the income by farms’ typology, the following summary conclusions have been made: • Direct payments influence positively the increase and stabilization of agricultural farms’ income; • There are significant differences in the level of support by farms’ typology: - Increasing significance of the subsidies for the formation of the income of field crop farms; - Stabilizing role for the income of farms with permanent crops and grazing livestock; - Almost neutral influence regarding income of farms with vegetables, pigs and poultry; • There is a deepening income differentiation between the big farms and the other two groups of farms-small and medium. • There is significant benefiting of a small number of big agricultural structures in the field crops sector (mostly cereals and sunflower), developing in economic boundaries comparable or even higher than those of European farms. • The overall assessment is that direct payments have total positive effect on farms’ income, but the support by farms typology is uneven and unbalanced.

Keywords: agricultural farms; CAP of EU; direct payments; income

Date published: 2018-03-06