The CAP coherence between redistributive and environmental goals: do the allocation criteria for direct payments play a role?

Abstract The Common Agricultural Policy (CAP) has incorporated climate change action and environmental care in addition to traditional goals aimed at enhancing farmers’ incomes. However, such a policy is not free from drawbacks and limitations, which limit its internal coherence and external credibility. In this paper, we focus on decoupled direct payments (DDP) investigating whether and how the choice of the criteria for their allocation across European farmers can impact on their targeting and on CAP coherence, that is, the ability to jointly contribute to redistributive and environmental goals. Based on a Spearman correlation analysis performed on the FADN dataset including farms from 28 European countries in the period 2015–2017, the present paper sheds lights on the disputed role of land as criterion of allocation of DDP. Despite a high level of heterogeneity of farms characteristics across the EU, quantitative evidence reveals the existence of alternative criteria to land for better allocating direct payments and improve their targeting, with positive consequence in terms of policy coherence.