The social sustainability of the CAP: Linking direct payments to labor force

The CAP is often criticised for its lack of targeting and consequent poor results. The critiques concern not only the menu of tools available within the CAP and their implementation but also the allocation of resources both at the macro (among the Member States) and the micro level (among farmers). The persistence of the economic crisis coupled with the soaring levels of unemployment, especially amongst the younger generations, will likely play a key role in the public discourse on the CAP reform post-2020. This paper focuses on the shift of the CAP design from a general and quite fuzzy “income support system” to a “job-maintenance-centred” one. The underlying idea is that agriculture should be kept alive and able to provide jobs combating depopulation and abandonment, while keeping rural areas lively, in a framework of multi-functionality and sustainability. The locus of the paper is twofold. Firstly, the goal is to test indicators better reflecting the shift of CAP support towards job maintenance in the general context of support allocation among Member States (MSs). The second question concerns the application of the same criteria used at the MS level for the redistribution among farmers, with a view to increasing the coherence among macro- and micro-level allocations, and thereby enhancing the consistency among objectives and endowments. In this paper, the agricultural labor force (LF) is utilized as the primary criterion for CAP direct payment allocations among MSs as an alternative to the Eligible Area (EA). At the farm level, the distribution among beneficiaries has been shaped in a way that strengthens the current “degressivity/capping” mechanism, so as to reinforce the tie between support and labor input in agriculture. The distributive effects on farms are highlighted with reference to the Italian case.