Examining disparities in common agriculture policy direct payments among farming systems: evidence from Portugal

Abstract

One of the stated goals of the common agricultural policy reforms has been to provide a fairer distribution of payments across and within member states, but little progress has been accomplished, with about 20% of farmers receiving 80% of the total amount of direct payments. This research aims to investigate the underlying structural factors that contribute to this inequity in Portugal, with a particular focus on farming systems. A logit model was developed using agricultural census data at the commune level, with the percentage of farmers receiving direct payments as the dependent variable. The findings reveal that the local importance of arable crops (cereals) and cattle farming systems, as well as the existence of larger farms and younger farmers, all contributed to farmers' increasing access to direct payments between 2009 and 2019. In traditional Mediterranean farming systems, access to direct payments has been restricted to a smaller proportion of farmers. Nevertheless, it is evident that a certain degree of redistribution took place during the previous programming cycle of the common agricultural policy. This redistribution included a shift in support from larger to smaller farmers, older to younger farmers, and from olives, cereals, and cattle to other farming systems, particularly vineyards.