Resilience in agriculture: How can cap direct payments impact it?

Abstract

The increasing frequency and magnitude of adverse meteorological events together with the growing uncertainty in the upcoming future pose more and more challenges to agriculture. Therefore, the future sustainability of agriculture will increasingly depend on its resilience, i.e. the capacity to withstand various perturbations and to recover from them. The direct payment (DP) system of the EU Common agricultural policy (CAP) is the most financed EU support scheme for agriculture; however, research on its impact on the important phenomena of resilience is scarce and fragmented. In order to fill this gap, this paper offers an extensive overview of literature and a summarized list of factors that are mentioned most often as potentially influencing the agricultural resilience. Based on this, the possible impact of DP on agricultural resilience was analyzed. In this paper, it is argued that this impact is transferred mostly through changing farms’ financial capabilities as well as farmers’ attitudes and behavior, and is both positive and negative. Such phenomena as low crop insurance uptake and decrease in productivity may be due to the overcrowding effects of direct payments. These hypotheses are being tested in a survey, conducted in the meantime.