Modelling the Impact of Agricultural Policies on Farm Investments under Uncertainty [E-Book]: The Case of the CAP Arable Crop Regime / Organisation for Economic Co-operation and Development
Paris : OECD Publishing, 2006
35 p.
Agriculture and Food
Full Text
This paper is part of the OECD project on decoupling and follows the analytical framework defined in OECD (2001). The main objective is to estimate the importance of the dynamic investment effects of area payments using farm level data from the Italian FADN survey. It investigates the investment response by crop producers under the assumption that they are risk averse, and there is uncertainty concerning prices. A dynamic econometric model is estimated. Investment is defined as current expenditure on machinery and buildings for crop production. This paper uses the same data as OECD (2002) and makes estimations and simulations in a way that can be compared with the results obtained in that paper.