Dimitrios Zormpas, University of Macedonia — Seminar December 3, 13.15, UMU Sam.A.397

We have the pleasure welcoming Dimitrios Zormpas, University of Macedonia, for giving a seminar entitled ”Investing in farming under uncertainty and redistributive support”. The paper is joint work with a Luca Di Corato from the Ca Foscari University of Venice.

Abstract: We develop a real options model to assess how the post-2023 Common Agricultural Policy (CAP) income support scheme influences landholders’ investment behavior. By introducing redistributive payments linked to the “first hectares” the reform increases per-hectare support for small farms relative to large ones, in addition to the basic payment received by all farms. We show that small farms respond to higher basic or redistributive payments with more aggressive investment strategies. In contrast, large farms exhibit a more nuanced response. Higher basic payments encourage investment, but greater redistributive payments lead to more conservative behavior. These dynamics create a “pooling effect” around the farm-size threshold distinguishing large from small farms. Our findings highlight the non-neutrality of CAP support and contribute to the broader debate on redistribution, land value capitalization, and the policy’s fiscal implications.

Very Welcome!