Farm level effects of policy reforms in Germany: First empirical evidence

The farm level effects of policy reforms in agriculture have been discussed in the literature for a long time. However, empirical studies based on field data are not yet available. In this paper, the effects of the EU agricultural reforms in the last two decades and the introduction of the German Renewable Energy Sources Act on agricultural enterprises are investigated. For this, panel data of arable farms in the German federal state of North Rhine-Westphalia for the period from 1984/85 to 2010/11 is analyzed by means of a fixed effects model. The results suggest that the farm income level, transmission effects on land rental markets and the farm income risk were significantly affected by the respective reforms.