Distributive impacts of alternative agricultural policies: A SAM-based analysis for Italy

This paper assesses the distributive impacts of alternative agricultural policies in a SAM (social accounting matrix) framework. A SAM of the Italian economy has been properly modified in order to focus on agriculture. In doing so, a new method for disaggregating the institutional sectors and the production factors in a SAM framework has been proposed. Two types of analysis have been carried out: (i) a multiplier analysis, and (ii) an assessment of the distributive impacts of different sector policies. The main results can be summarised as follows: (i) ‘fully’ decoupled agricultural household income supporting schemes (transfers to agricultural households) are the most equitable interventions and determine a perfect target of the distributive effect on the relevant institutional sectors; (ii) ‘partially’ decoupled income supporting interventions, such as the ones implemented under the CAP before the Mid Term Review, are more effective than others (i.e., through multiplier effects) in indirectly generating positive impacts on the income of agricultural households; (iii) agricultural price support interventions show less desirable effects in terms of their distributive impacts: they are less effective as agricultural income-increasing policies and their distributive impacts are biased against poorer households both in agricultural and non-agricultural sectors.