The income effects of direct payments on internal convergence models in Italy

Abstract

In a troubled time, the Common agricultural policy (CAP) again decisively influences farms’ strategic choices. Therefore, the need to enhance the net farm income (NFI) has remained one of its cornerstones. The so-called “national flexibility” offered the opportunity to improve consistency between national targets and political decisions to allow a greater effectiveness of public resources. These tasks were particularly intricate for the Italian Government, which had to face the consequences of the overall reduction of ceilings for direct payments. Considering that the choice of a specific internal convergence model affects the profitability of many farms, this represents one of the most relevant decisions Italy had to take.
The article aims at analysing and comparing how convergence models might differently impact on net farm incomes.