The consequences of Less Favoured Area support: A multi-regional CGE analysis for Poland

Abstract

On accession to the EU, Poland, one of the most agricultural countries in Europe, became eligible for the Common Agricultural Policy (CAP), which it perceived as a chance to develop its rural economy. However, in constructing its Rural Development Programme 2007-2013, Poland directed the largest funding share to Less Favoured Areas (LFA) - a controversial measure, which has been accused of poor targeting and ineffectiveness. We analyse the economic consequences of LFA support for all 16 Polish regions according to Nomenclature of Territorial Units for Statistics (NUTS2), using a multi-regional computable general equilibrium model with LFA detail.