The Common Agricultural Policy (CAP) in Extremadura (SW Spain) during the Period 2014–2020:New Opportunities for Economic Diversification in Rural Areas?

The Common Agricultural Policy (CAP) is a European policy created in the early 1960s to address the food and economic problems affecting European society and the agricultural sector in particular. Throughout its history, the various reforms carried out in this policy have oriented it towards a reduction of direct aid to farmers’ production (due to its excessive cost, among other reasons), in favor of income-related aid. In recent years, the agricultural sector in Extremadura has received CAP aid in a very unequal manner, with a more significant concentration in the agricultural areas where intensive production has been established as a base and where there is a larger population. Thus, the main objective of this research is to analyze the spatial relationships between CAP subsidies and other demographic, economic and social context variables. To achieve the proposed objective, a spatial regression model, namely Geographically Weighted Regression (GWR), has been calculated to determine the relationship between the amounts received from the CAP and the socioeconomic situation of each of the municipalities in the region. The results show a concentration of this aid in the most dynamic areas, with municipalities with a larger population and a more productive agriculture, mainly related to irrigated farms.