Estimating the Impact of Decoupled Payments on Farm Production in Northern Ireland: An Instrumental Variable Fixed Effect Approach

Sustainability

Myles Patton¹  KehindeOluseyi Olagunju²  Siyi Feng³ 

[1] Department of Agriculture, Environment and Rural Affairs, Dundonald House Upper Newtownards Road, Belfast BT4 3SB, UK;Economics Research Branch, Agri-food and Biosciences Institute, 18a Newforge Lane, Belfast BT9 5PX, UK;Independent Researcher, Belfast BT9 5PX, UK;

关键词: farm production;    instrumental variable;    subsidy;    fixed effect;   

DOI  :  10.3390/su12083222

来源: DOAJ

【 摘 要 】

The production stimulating impact of agricultural subsidies has been a well-debated topic in agricultural policy analysis for some decades. In light of the EU reform of the Common Agricultural Policy (CAP) in year 2005 in which agricultural subsidies were decoupled from current production decisions and the modification to this payment in 2015, this study investigates the impact of decoupled payments under these two reforms on livestock production in Northern Ireland. The study uses a farm-level panel dataset covering 2008–2016 period and employs an instrumental variable fixed effect model to control for relevant sources of endogeneity bias. According to the empirical results, the production impacts of decoupled payments were positive and significant but with differential impacts across livestock production sectors, suggesting that decoupled payments still maintain a significant effect on agricultural production and provide an indication of the supply response to changes in decoupled payments.

【 授权许可】

Unknown