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Abstract

The Common Agricultural Policy (CAP) is a major driver of the environmental and social sustainability of the agriculture in the European Union (EU). Under the 2003 CAP reform, most direct payments to agricultural producers were decoupled from production. This work assesses the possible impact of the CAP reform on the sustainability of an irrigated area of Central Italy with particular attention being paid to decoupling. The analysis has been conducted using the Positive Mathematical Programming (PMP) method that directly estimates the cost function parameters by imposing the first-order conditions of the farm model under consideration. The analysis assesses the impact of the CAP reform on farm cropping patterns, water and chemical use, labour use and economic results. By referring to this set of indicators it is possible to investigate the likely effect of the CAP reform on the environmental, social and economic sustainability of the considered farming systems. The results of the empirical analysis mainly show a reduction in water and chemical input use, an increase in the economic results of farms, but also a reduction of the labour.

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