IMPACT OF THE COMMON AGRICULTURAL POLICY PAYMENTS TOWARDS ROMANIAN FARMS

Romanian areas have suffered of an intense out emigration from rural areas. In order to reduce the socio-economic marginalization the European Union by the Common Agricultural Policy (CAP) has supported more initiatives aimed at implementing the diversification in rural areas. The aim of this paper was to assess by a quantitative approach in Romanian farms belonging to the FADN dataset some relationships among the financial subsidies allocated by the CAP and the level of wealth in rural areas. It has used in this research a dual and different methodology of investigation. It has employed in the first phase the multiple regression model and in the further step the Structural Equation Modeling aimed at estimating the cause effect relationships between all investigated variables over the time 2007-2015. Findings have pointed out as the level of wealth in rural areas has been influenced by the financial subsidies allocated by the Common Agricultural Policy and a positive impact has been also assessed focusing the attention on the total CAP payments towards the level of farmer's net income.