Exploring the distribution of direct payments of the common agricultural policy”. WIFO working papers 330

Abstract – Direct payments are the most important expenditure of the Common Agricultural Policy (CAP), equivalent to more than two thirds of the EU farm policy budget in 2006. They are mostly spent for de-coupled direct payments (DDPs). The EU plans to further reduce direct payments for plant and animal products and to expand the volume of DDPs which are intended to be allocatively neutral. Such a move im-plies that distributive aspects of CAP expenditures will become more important. This contribution looks at this issue by calculating various measures of con-centration based on statistics on recipients of direct payments covering a period of 2000 to 2006. The results show that direct payments are skewed to-wards a small number of very large holdings in a few member states.