The distributional impact of agricultural policy tools on Italian farm household incomes

This paper analyses the impact of a set of direct payment tools of the Common Agricultural Policy on the distribution of household income among Italian farm families. It considers a large sample of Italian farm families and applies the Gini decomposition approach. The analysis accounts for direct payments of the Pillar 1 (decoupled, coupled and modulation payments) and of the Pillar 2 of the CAP (agro-environmental and compensatory payments). While the overall amount of direct payments reduces income concentration, the situation is very different among the tools under consideration. Furthermore, the situation differs among the three altimetry zones in which the full sample has been disaggregated.