Elisa Montresor

Tools for evaluating EU agricultural policies: an integrated approach

The aim of this paper is to propose a theoretical “multi-phase” strategy for analysing in dynamic terms the territorial impact of agricultural and environmental EU policy measures. This approach should also allow to evaluate the adjustment capability of farms as a function of the characteristics of different territories. The proposed methodology is illustrated by an example using data relative to the 41 provinces of Northern Italy. In the first step, a multivariate statistical analysis (MSA) consisting in Principal Component Analysis and Cluster Analysis leads to the identification of homogeneous clusters of territorial units. The territorial mapping is conditional to a predetermined set of indicators that takes into account different aspects of agricultural development. In a second step, Positive Mathematical Programming (PMP) allows to introduce the impact of agricultural policies (compensatory payments, price changes, etc.) returning different scenarios of land use and agricultural profitability. According to the outputs of the PMP, the third step consists in a new MSA for detecting any changes in the territorial mapping. Convergence analysis can then synthesise the impact of the different policy options.

The convergence process of the European regions: the role of Regional Policy and the Common Agricultural Policy.

Currently a large share of the European Union (EU) budget is directed toward two policies with different implications at territorial level. The fi nancial resources of the Cohesion Policy (CP)1 represent about one third of the total EU budget while the Common Agricultural Policy (CAP) accounts for over 40%. The main operational tools of Cohesion Policy are the Structural Funds (SF) whose aim is reducing regional disparities in terms of income, wealth and opportunities. On the other hand, the CAP has a more sectoral focus and is confi gured with an only partial spatial dimension (EC, 2010), despite the fact that since 1992 it increased its effects on the cohesion process. This means that the territorial impacts of these policies could be asymmetric, not allowing overcoming of territorial disparities. In considering the distribution of CAP subsidies we should take into account that ‘growth in poorer regions is greatly hampered by an unfavourable industrial structure (dominated by agriculture)’ (Cappelen et al., 2003, p.640) and that according to Montresor and Pecci (2008) in some regions CAP subsidies were far higher than those of the CP and focused mainly in the more developed regions. Loosely speaking the issue consists of choosing if the distribution CAP subsidies must follow criteria based on effi ciency or on equity. Starting from these previous fi ndings, the main objective of this study is to answer this question: how effective has the EU regional development policy supported by the SF and the CAP been in promoting economic growth and in fostering the convergence of EU regions? It should be recalled that in 1989, when the EU CP began, there were strong doubts about its effectiveness. These low expectations were mainly related to the poor performances of regional development policies carried out in the Member States (MS) and to the fear that the less developed areas