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IS LOW FARM INCOME STILL A PROBLEM IN EUROPEAN CONTEMPORARY AGRICULTURE?

IS LOW FARM INCOME STILL A PROBLEM IN EUROPEAN CONTEMPORARY AGRICULTURE? Bruno Henry de Frahan, Tharcisse Nkunzimana, Rembert De Blander and Frédéric Gaspart Université catholique de Louvain, Belgium & Daniel A. Sumner University of California at Davis, USA

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IS LOW FARM INCOME STILL A PROBLEM IN EUROPEAN CONTEMPORARY AGRICULTURE?

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  1. IS LOW FARM INCOME STILL A PROBLEM IN EUROPEAN CONTEMPORARY AGRICULTURE? Bruno Henry de Frahan, Tharcisse Nkunzimana, Rembert De Blander and Frédéric Gaspart Université catholique de Louvain, Belgium & Daniel A. Sumner University of California at Davis, USA Contact: bruno.henrydefrahan@uclouvain.be ABER/BVLE Symposium, Louvain-la-Neuve, December 11, 2008 Extracts from a paper presented at the 109th EAAE Seminar " THE CAP AFTER THE FISCHLER REFORM: NATIONAL IMPLEMENTATIONS, IMPACT ASSESSMENT AND THE AGENDA FOR FUTURE REFORMS" Viterbo, Italy, November 20-21st, 2008

  2. Test determinantsto farm household incomes • Commodity market conditions • Factor market conditions • Income-earning capacity and non-pecuniary aspects

  3. Conclusions • Low farm income is not a problem anymore in the surveyed European countries • Greater income inequality and poverty incidence and intensity among farm households • Relative farm household incomes depend: • more on general labour market conditions and marketable skills • less on direct payments and LT interest rates • not on agricultural output/input prices

  4. Recommendationsfor reforming the CAP • Switch to a comprehensive rural policy: • Rural employment • Rural infrastructure • Education & training • Target farm direct payments on provision of positive externalities and public goods • Pay attention to cost of capital • Revisite distributional policy for targeting it better to the low income group of farm households

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