Assessment of inequality in the Common Agricultural Policy in Portugal

Abstract

The Common Agricultural Policy (CAP) continues to represent a substantial part of the European Union's budget. Although the second pillar is co-financed by national governments, European funds represent the vast majority of public spending on agriculture and rural development. In the case of Portugal, the CAP envelope for the current Multiannual Financial Framework (MFF 2021–2027) represents a package of €10 billion. Our article focuses on the distribution of CAP support. Based on a synthetic indicator of equity aligned with the European Union objectives of the CAP, we assess the current distribution of CAP support and estimate its distribution in the future according to the new rules that come into force in January 2023. According to the data analyzed, the major factor of inequality in the CAP in Portugal rests in the exclusion of a significant part of agricultural holdings. In this sense, it is necessary to understand the reasons for this exclusion in order to study measures so that CAP rules can contribute to a fairer distribution between farmers and between regions.