Essays on Policy Evaluation: Examining the Impact of the Common Agricultural Policy on the Environment and Labour Market

Abstract

The European Commission has pinned down its Europe 2020 Strategy: restraining Europe's weak structural economy by means of inclusive growth. This thesis seeks to empirically assess and study policies pertaining to this goal in efforts of suggesting sound policies for policymakers. Specifically, this thesis assesses the sustainable improvement of employment levels and the environment so as to evaluate the achievement of this objective. The main concern is that if not accompanied by such inclusive developmental policies, economic growth will increase inequality and poverty. As inclusive growth and rural development are part of the European Union's (EU) structural assistance policies, the EU has reformed the Common Agricultural Policies (CAP) to strengthen agriculture and improve the living standards of the vulnerable population. This thesis will be analyzing in depth the impact of this policy on several economic and environmental indicators across the EU and England. This will be done across the two main chapters of this thesis: Chapter 2, which discusses the impact of CAP on sustainable employment in the EU, and Chapter 3, which discusses the impact of one of the sub-pillars of the CAP on the natural environment in England. Chapter 2 explores factors that enhance job creation in the agricultural sector by focusing on the impact of the EU's CAP. Combining two regional datasets, Eurostat and the Farm Accountancy Data Network (FADN), which cover labour market outcomes and CAP payments respectively for 24 EU countries over the period 2000-2008, this chapter analyzes the impact of two key reforms to the CAP program. The first reform is a shift from farmer subsidies that were linked to the production of particular types of crops and livestock to subsidies that are linked to the number of hectares that farmers have in their lands, independent of the type of production. The second is the introduction of rural development subsidies. To empirically assess the influences of these reforms, Chapter 2 estimates their impact on the share of agricultural employment, labour productivity, and out-farm migration using fixed effects techniques. Additionally, as a means of robustness check, the Generalized Method of Moments (GMM) is used to correct for endogeneity. This study also looks at whether these effects are consistent across the entire panel of European countries, or whether there exists a differential impact between Eastern Europe and Northern Europe. Finally, in efforts of testing whether any existing improvements in labour market indicators are sustainable, this chapter examines the effect of CAP payments on part-time workers. The main findings of this chapter are that both reforms improved the share of agricultural employment. Furthermore, the impact of the CAP reforms is found to be similar across both Eastern Europe and the rest of Europe. Finally, the magnitude of rural development subsidies in creating employment opportunities in the agricultural sector is higher than that of direct payments. Chapter 3 investigates the extent to which professional environmental advice provision can improve both environmental performance and also income of farmers. Specifically, this study examines the impact of "professional environmental advice" as a policy intervention to improve the effectiveness of the Entry Level Stewardship Scheme (ELS). In particular, it analyzes both the impact of advice on farm performance (as measured by agricultural output, agricultural productivity and labour productivity) and the impact of advice on environmental outputs (as measured by agri-environmental payments schemes and Agriculture Footprint Index (AFI)). Data provided by the Farm Business Survey (FBS) is used to track farmers in England over the period of 2008-2010 who took "professional environmental advice". In order to address concerns of self-selection that arise due to the voluntary nature of the program, this study has relied on panel fixed effect at the fa

Date of Award	1 Aug 2019
Original language	English
Awarding Institution	The University of Manchester
Supervisor	Ada Wossink (Supervisor)