CAP After 2004: Policy to Promote Development or to Elimination Differences Between Regions? Non-parametric Approach Based on Farm Efficiency in the Old and New EU Regions

Abstract

In the light of the Treaty establishing the European Economic Community (Treaty of Rome) of 25 March 1957, the primary aim of the Common Agricultural Policy is to provide European Economic Community citizens with adequate amounts of food at reasonable prices and to guarantee farmers a decent standard of living. That is more, the EU fund transfers were to eliminate differences between regions and promote development of individual regions. These aims proved to be particularly important following the EU enlargement in 2004. The indispensible effect of the integration process has been connected with changes in the directions of agricultural production and efficiency of utilisation of individual inputs. Nevertheless, it is difficult to evaluate the effects of the implemented policy based on univariate comparisons. In view of the above, the aim of this paper is to assess the effects of the agricultural policy and the cohesion policy implemented in the EU, focusing on the valuation of the impact of the greatest EU enlargement on this relationship. This goal was achieved thanks to constructing multivariate rankings applying the DEA super-efficiency model for average farms specialising in plant, animal and mixed production in individual EU member countries for two period. The application of the DEA efficiency model makes it possible in the computation process to take into consideration the fact that in the course of agricultural production three groups of products are manufactured involving four basic types of inputs. The starting point for the analyses was provided by data published within the FADN agenda for average farms operating in the countries being the EU members. The results showed that after the largest enlargement of the EU, in the case of plant and livestock production, a simultaneous increase in agricultural production and improvement in efficiency in the individual EU members was achieved, with a gradual reduction of disproportions in the efficiency of agricultural production between regions. The only area where such a relationship could not be observed was related to the production of mixed-type farms. The novelty of the proposed in this article approach is that it allows for simultaneous analysing of changes in EU agriculture while taking into account several perspectives: changes in the assumptions of the common agricultural policy, the consequences of EU enlargement, and results of the implementation of the cohesion policy.