Economic importance of the Common Agricultural Policy in terms of agricultural production in Hungary and its implications after 2020

The development of agricultural production and structures is of high importance in the context of the Common Agricultural Policy (CAP). Our research is based both on evidence from former research, and on assessments obtained by simulat- ing the functioning of the different direct support measures of the CAP in the period from 2014 to 2020. The impacts of voluntarily coupled support schemes and compulsory greening, as well as the optional introduction of total external convergence of area based direct payments are examined, and projections by the Common Agricultural Policy Regional Impact Analysis (CAPRI) simulation model for 2020 are used for the evaluation. The results show that the different policy options have had a very moderate impact on agricultural production. The economic impacts of the second pillar of the CAP are examined in the light of the results of the ex post evaluation of the Rural Development Programme (RDP) 2007-2013 and the evaluation of the RDP plan 2014-2020 of Hungary. Trends in farm structures are also presented through the changes in the context indicators during the period of 2005-2013. The results imply that no significant economic development occurred. Conclusions are drawn and recommendations are formulated to help with designing future agricultural policies.