Direct Payments between Income Support and Public Goods

Abstract

Direct payments maintain a fundamental role in the future CAP, since they still absorb a high share of the CAP budget. However, despite some confirmations (mainly related to internal convergence, types of interventions and the role of genuine/active farmers), several relevant innovations (e.g., a reinforced cross-compliance, new eco-schemes that replace the greening payments, a new capping model) are expected to affect their implementation and the way they contribute to achieving the CAP goals. The aim of this article is twofold. First, it analyzes the innovations that are going to be applied in relation to direct payments, following the two strategic objectives these public aids have been traditionally called to pursue: enhancing income support and fostering the provision of environmental public goods. Secondly, it focuses on three types of direct payments – basic income support for sustainability, eco-schemes, coupled payment – in order to provide indications on their greater effectiveness, with particular reference to the Italian case.