The impact of the CAP reforms on the efficiency of the COP sector in Spain

The arable crop sector (COP) occupies a prominent position within the European Union’s agricultural sector. Within Spain, the COP sector accounts for almost a third of total Agricultural Guidance and Guarantee Fund expenses, and a half of the utilised agricultural area. The COP sector is not only relevant because of its physical and economic magnitude, but also because of the political attention it receives. The Common Agricultural Policy reforms that occurred during the 1990s paid special attention to this sector. This paper aims at determining the impacts of Agenda 2000 on a sample of Spanish COP farmers’ production decisions by using an output-oriented stochastic distance function. The distance function allows assessing the reform-motivated changes on total output, input used, input composition and crop mix. It also permits to assess the impacts of the reform on farms’ technical efficiency. Results show that the reform has shifted outwards the production frontier and changed output composition in favour of voluntary set aside land. With respect to input composition, Agenda 2000 has induced a decrease in land, fertilizers and other inputs in favour of labour. In addition, Agenda 2000 had a negative impact on technical efficiency.