Who Benefits from CAP? The Way the Direct Payments System Impacts Socioeconomic Sustainability of Small Farms

The effects of globalization have often been adverse for the agricultural sector, especially its most vulnerable element&mdash
the small farm. The importance of the agricultural sector as a whole and small farms in the sense of ensuring food security, employment and viability of rural areas, implies a necessity to support the sector and small farms in particular. For this purpose, the Common Agricultural Policy (CAP) of the European Union (EU) seeks to boost the sustainability of agriculture in multiple dimensions. The 2013 reform of the CAP has provided a particularly strong impetus towards this direction. This paper establishes an indicator system to quantify the effects of the CAP direct payments on the socioeconomic sustainability of small farms. Expert survey and multi-criteria assessment are used to this end. The Technique for Order of Preference by Similarity to Ideal Solution (TOPSIS) method is applied for the multi-criteria analysis. Lithuania is taken as a case study. The results show that, in the case of Lithuania, the direct payment system did not contribute to the improvement in socioeconomic sustainability of small farms up until 2013 CAP reform when its impact became undeniable.