The influence of agri-environmental policy on Italian farms: an analysis of efficiency

Nicola Galluzzo

Abstract: In the literature, there is a gap in respect to the effects of agri environmental subsidies on the technical efficiency of Italian farms. In particular, there are currently no two-stage estimations of technical efficiency aimed at evaluating the impact of agri-environmental subsidies disbursed through the Common Agricultural Policy. The main purpose of this research, then, was to analyse the effect of agri-environmental subsidies on Italian farms included in the Farm Accountancy Data Network for the years 2004 to 2019, and to assess how the agri environmental policy impacts on different types of farming. The findings have revealed that the agrienvironmental subsidies have had the effect of reducing the level of technical efficiency in all farms included in the Italian FADN dataset. Farms have been differently impacted by these agri-environmental subsidies in function of their particular specialisation, with the most notable effects found in horticulture, wine, and dairy production.

Keywords: Common Agricultural Policy; Data Envelopment Analysis; FADN; second pillar; separability

Date published: 2022-07-18