Do CAP direct payments stabilise farm income? Empirical evidences from a constant sample of Italian farms

Agricultural and Food Economics

Table 4 Income stabilising effect of direct payments

		Sample size number	Importance of DP:		Coefficient of variation of			Difference between
			PSE^a	DP/FI	FI	MI	DP	CV(MI) and CV(FI)
			Mean		Median			Var.^b
Types of farming (TF):	TF
Specialist field crops	1	443	19.9 %	49.4 %	0.608	1.287	0.304	−52.8 % ***
Specialist horticulture	2	276	0.8 %	2.0 %	0.604	0.612	1.823	−1.3 %
Specialist permanent crops	3	689	7.7 %	19.7 %	0.646	0.774	0.699	−16.5 % ***
Specialist grazing livestock	4	467	15.1 %	35.5 %	0.567	0.861	0.361	−34.2 % ***
Specialist granivore	5	82	5.7 %	13.2 %	0.715	0.900	0.352	−20.6 % ***
Mixed cropping	6	147	12.2 %	31.9 %	0.690	0.952	0.474	−27.5 % ***
Mixed livestock and Mixed crops-livestock	7	87	16.2 %	44.0 %	0.583	1.207	0.281	−51.7 % ***
Economic size (ESU):
Small (Classes 1, 2, 3)		603	12.5 %	33.3 %	0.690	1.046	0.422	−34.1 % ***
Medium (Classes 4, 5, 6)		1484	11.2 %	26.9 %	0.592	0.819	0.445	−27.7 % ***
Large (Classes 7, 8)		104	8.2 %	20.4 %	0.612	0.790	0.412	−22.5 % **
PSE level:
No DP	0	247	0.0 %	0.0 %	0.599	0.599	0.000	0.0 %
Low	1st	538	2.0 %	5.6 %	0.665	0.687	1.068	−3.2 %
Low-Medium	2nd	523	8.0 %	22.1 %	0.615	0.756	0.444	−18.6 % ***
Medium-High	3rd	500	16.3 %	44.0 %	0.632	1.107	0.334	−43.0 % ***
High	4th	383	30.4 %	66.7 %	0.546	1.506	0.296	−63.8 % ***
Total sub-sample		2191	11.4 %	28.4 %	0.615	0.871	0.438	−29.4 % ***

Variability of farm income (FI), market income (MI = FI–DP) and direct payments (DP). Median of the coefficients of variation (CV) of FI, MI and DP. Difference between variability of MI and of FI. Whole sub-sample and considered groups
^aPSE = DP/(REV + DP). ^bCalculated as: (CV(MI) − CV(FI))/CV(FI). Significant difference at 1 % (***), 5 % (**).
Source: Own elaborations on the sub-sample of farms with MI greater than zero. Years 2003–2012