16. Influence of the direct payments on the farmers’ behaviour in Bulgaria

Implementation of the CAP during the 60’s and 70’s of the last century led to the creation of large surpluses of agricultural production and distorted the market prices. To overcome these problems during the 80’s a reform was launched, aiming at reducing surpluses; stimulating diversification of production; environmental protection; development of the food industry.
Direct payments are one of the main instruments of the CAP for the period 2007–2013. The purpose of this work is to study theoretically the effect of the single area payment on the behaviour of farmers. The main thesis is that these payments applied under the conditions of „weak“ property rights on the land would lead to deformation of the crop structure and indirectly to price distortion of agricultural products.