A PMP model for the impact assessment of the Common Agricultural Policy reform 2014-2020 on the Italian tomato sector
New Medit, vol 13, n.2, (June 2014), pp. 9-19
Jel classification: C61, Q12, Q18
The recent reform of the Common Agricultural Policy (CAP) establishes a new payment model mainly divided into a basic component and a greening component. This paper focuses on the effect of the convergence of direct payments and the three greening requirements: crop diversification, maintenance of permanent grassland and establishment of the ecological focus areas. The aim is to evaluate the effect of different proposals for the CAP Post-2013 on Italian farms, particularly on the processing tomato sector. Positive Mathematical Programming (PMP) is used to simulate different hypotheses of convergence and greening as proposed by the European Commission, the European Parliament and the Council of the EU. Commission proposals are shown to have different impacts compared to the other two. Commission proposals would significantly influence the regional production plan, leading to big reductions in cereal production and farm income. Parliament and Council two proposals would have lower impact on arable crop dynamics. In terms of land use, the tomato sector is relatively unaffected by the reform, but the payment convergence process significantly reduces tomato farm income.
Cap reform, greening, positive mathematical programming, processing tomato, farmer behaviour