EUROPEAN UNION DIRECT PAYMENTS TO FARMERS REVISITED

Abstract: A logistic function framework is used to allocate European Union Common
Agricultural Policy (CAP) direct payments to farmers among the different member
states. Total CAP expenditure is the starting point for the process, which contemplates
two phases.

In Phase 1 expenditure is allocated by taking into consideration the
economic dimension of farms in each country. In Phase 2 the amount allocated to each
member state is further modulated to accommodate both economic efficiency and green
house gas emissions generated by the country

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