Analysis of the impact of the decoupling of the CAP (and the State) payments on the behavior of dairy farmers of Lithuania

Abstract

This paper is based on the MSc thesis report, in which we investigate the potential impact of the decoupling (of the CAP and the state payments) on the production behaviour of dairy farmers of Lithuania. In the report we argued that the impact of the decoupling on the farm production in Lithuania could be different from the one in the old EU member states. The main reasons for that included: phasing-in of CAP payments, nonbinding quota and particularities of Lithuanian agriculture (dairy farming). The hypothesis of our thesis was that the direct impact of the decoupling on the farm production in Lithuania was negligible but the indirect (positive) impact (through farm investments) was notable. To research the topic we did the farm survey. The construction of the farm survey (the questionnaire) was based on the economic theory which served as a background and a theoretical justifi cation for the study. We interviewed thirty-one farmers which had six or more cows per farm. The analysis of results of survey led to the confi rmation of our thesis hypothesis. However, in this paper we do not present the analytical part of the research. We focus on the theoretical background and the methodological framework of the study. We provide the main outcomes of our analysis in the discussion part (conclusions). In the latter part we also provide suggestions for the future research; how to improve our existing questionnaire we used to interview farmers; what questions should be asked and which areas should be given more attention?