Economics & Sociology

ISSN: 2071-789X eISSN: 2306-3459 DOI: 10.14254/2071-789X
Index PUBMS: f5512f57-a601-11e7-8f0e-080027f4daa0
Article information
Title: Brexit and EU Common Agricultural Policy: The possible consequences for Lithuania
Issue: Vol. 12, No 2, 2019
Published date: 06-2019 (print) / 06-2019 (online)
Journal: Economics & Sociology
ISSN: 2071-789X, eISSN: 2306-3459
Authors: Artiom Volkov
Lithuanian Institute of Agrarian Economics

Tomas Baležentis
Lithuanian Institute of Agrarian Economics

Mangirdas Morkūnas
MykolasRomeris University

Dalia Streimikiene
Lithuanian Institute of Agrarian Economics
Keywords: Brexit, common agricultural policy, scenario modelling, Lithuania
DOI: 10.14254/2071-789X.2019/12-2/20
Index PUBMS: 259c67f7-ad4f-11e9-bbfd-fa163e0fa1a0
Language: English
Pages: 328-344 (17)
JEL classification: Q14, Q18

This paper examines the possible Brexit scenarios and their impacts on the Common Agricultural Policy (CAP) of the European Union (EU) with particular focus on Lithuania. The paper outlines the scientific discourse on the imminent modifications of the CAP after the Brexit along with changes in the EU budget. The paper was prepared during the beginning of Brexit negotiations, with withdrawal terms not being publicly disclosed. Thus, the most likely assumptions have been accepted in order to model the scenarios. The possible effects of Brexit on the agriculture of the small EU Member States are discussed taking the case of Lithuania as an example. The empirical analysis showed that, in the case of three different Brexit-induced CAP modifications, Lithuanian agricultural sector may lose 1% to 20% of financial support under the CAP direct payment mechanism. The corresponding loss under these scenarios is quantified for agricultural sectors of all the EU Member States.


1. Bachtler, J., & Mendez, C. (2016). EU Cohesion Policy and European integration: The dynamics of EU budget and regional policy reform. Routledge.

2. Bartolini, F., & Viaggi, D. 2013. The Common Agricultural Policy and the Determinants of Changes in EU Farm Size. Land Use Policy, 31, 126–133.

3. Bateman, I. J., & Balmford, B. (2018). Public funding for public goods: A post-Brexit perspective on principles for agricultural policy. Land Use Policy, 79, 293-300.

4. Bergin, A., Garcia-Rodriguez, A., Morgenroth, E. L., & Smith, D. (2017). Modelling the Medium-to Long-Term Potential Macroeconomic Impact of Brexit on Ireland. The Economic and Social Review, 48(3, Autumn), 305-316.

5. Boulanger, P., &Philippidis, G. (2015). The End of a Romance? A Note on the Quantitative Impacts of a ‘Brexit’from the EU. Journal of Agricultural Economics, 66(3), 832-842.

6. Bruno, R., Campos, N., Estrin, S., & Tian, M. (2016). Technical Appendix to ‘The impact of Brexit on foreign investment in the UK’Gravitating towards Europe: an econometric analysis of the FDI effects of EU membership. Center for Economic Performance, Lon

7. Busch, B., & Matthes, J. (2016). Brexit-the economic impact: A meta-analysis (No. 10/2016). IW-Report.

8. Carney, M. (2016) Uncertainty, the economy and policy. Retrieved from

9. Council, 1985. Council decision of 7 May 1985 on the Communities' system of own resources (85/257/EEC, Euratom). Official journal of the European Communities (14.05.85)

10. Culkin, N., & Simmons, R. (2019). Shock Therapy and Entrepreneurial Flare# Brexit. International Journal of Entrepreneurial Behavior& Research.

11. Darvas, Z., & Wolff, G. B. (2018). Rethinking the European Union’s post-Brexit budget priorities. Bruegel Policy Brief ISSUE 1| MARCH 2018.

12. Darvas, Z., & Wolff, G. B. (2018). What budget for the EU?–Principles, spending priorities and the impact of Brexit.

13. Ebell, M., & Warren, J. (2016). The long-term economic impact of leaving the EU. National Institute Economic Review, 236(1), 121-138.

14. European Commission (2016). Consolidated Annual Accounts of the European Union 2015. Brussels, 11.7.2016. COM (2016) 475 final.

15. European Commission (2017a). Position paper "Essential Principles on Financial Settlement", TF50 (2017) 2/2 – Commission to UK, 12 June 2017. Accessible on the internet:

16. European Commission (2017b). White paper on the future of Europe and the way forward. Reflections and scenarios for the EU27. Accessible on the internet:

17. European Commission, 2018. Budget. Multiannual Financial Framework budget in figures. Interactive: EU expenditure and revenue 2014-2020. Accessible on the internet:

18. European Council (2017). Council (Art 50) authorises the start of Brexit talks and adopts negotiating directives. Brexit: Negotiating directives – 22 May. Brussels, 22 May 2017. Accessible on the internet:

19. European Parliament (2017). Research for AGRI Committee – Possible impact of Brexit on the EU budget and, in particular, CAP funding.

20. Europos Komisija (2017). Komisijos komunikatas Europos vadovųtarybai (50 straipsnis) dėlderybųsu Jungtine Karalystepagal Europos Sąjungossutarties 50 straipsnįpažangos. COM (2017). 784 final. Briuselis, 2017 12 08. Retrieved from

21. Financial Times (2017). Brexit timeline: Key dates in UK’s divorce with EU. June 14, 2017. Retrieved from

22. Golab A., Jie F., Powell R., & Zamojska, A. (2018). Cointegration between the European Union and the selected global markets following Sovereign Debt Crisis. Investment Management and Financial Innovations, 15(1), 35-45. doi:10.21511/imfi.15(1).2018.05

23. Grant, W. (2018). Brexit and agriculture. In Routledge Handbook of the Politics of Brexit, 108-118. Routledge.

24. Haas, J., & Rubio, E. (2017). Brexit and the EU budget: Threat or opportunity. Jacques Delors Institute Policy Paper, 183.

25. Helm, D. (2017). Agriculture after brexit. Oxford Review of Economic Policy, 33(suppl_1), S124-S133.

26. Kierzenkowski, R., Pain, N., Rusticelli, E., & Zwart, S. (2016). The economic consequences of Brexit.

27. Kiss, J. 2011. Some Impacts of the EU Accession on the New Member States’ Agriculture. Eastern Journal of European Studies, 2(2), 49-60.

28. Kozhukhіvska, R., Kulbitsky, V., Kyryliuk, I., Maliuga, L. and Podzigun, S. (2018). Managing the efficiency of enterprises based on assessment of the land resource potential. Problems and Perspectives in Management, 16(2), 164-178. doi: 10.21511/ppm.16(2)

29. Lawless, M., &Morgenroth, E. L. (2019). The Product and Sector Level impact of a hard Brexit across the EU. Contemporary Social Science, 1-19.

30. Lizińska, W., Marks-Bielska, R., & Babuchowska, K. (2017). Intervention on the agricultural land market in relation to the end of the transitional period for purchasing agricultural land by foreigners. Equilibrium. Quarterly Journal of Economics and Econo

31. Matthews, A. (2016). The Potential Implications of a Brexit for Future EU Agri‐food Policies. EuroChoices, 15(2), 17-23.

32. Matthews, A. (2017a). Impact of Brexit on CAP budget net balances for remaining Member States. CAP reform EU. Retrieved from

33. Matthews, A. (2017b). Which EU countries will bear the brunt of a hard Brexit? July 31, 2017. Retrieved from

34. McMahon, J. (2018). Brexit, trade and agriculture: waiting for answers. Journal of International Trade Law and Policy, 17(1/2), 19-33.

35. Nunez-Ferrer, J., & Rinaldi, D. (2016). The Impact of Brexit on the EU Budget: A non-catastrophic event. CEPS Policy Brief, (347).

36. Owen, E., & Walter, S. (2017). Open economy politics and Brexit: insights, puzzles, and ways forward. Review of international political economy, 24(2), 179-202.

37. Reiff, M., Surmanová, K., Balcerzak, A. P., & Pietrzak, M. B. (2016). Multiple criteria analysis of European Union agriculture. Journal of international studies, 9(3), 62-74.

38. Sampson, T. (2017) Brexit: The Economics of International Disintegration. Journal of Economic Perspectives, 31(4), 163-84. doi:10.1257/jep.31.4.163.

39. Simionescu, M., Bilan, Y., Smrčka, L., & Vincúrová, Z. (2017). The effects of European economic integration and the impact of Brexit on the UK immigrants from the CEE countries. E+ M Ekonomie a Management, XX(1), 29-47.

40. Simionescu, M. (2018). The impact of Brexit on the UK inwards FDI. Economics, Management and Sustainability, 3(1), 6-20. doi:10.14254/jems.2018.3-1.1

41. Sorace, M., & Hobolt, S. B. (2018). Brexit identities play a role in how people view the economy and immigration. LSE Brexit.

42. Swinbank, A. (2016). Brexit or Bremain? Future options for UK agricultural policy and the CAP. EuroChoices, 15(2), 5-10.

43. Szczepaniak, I. (2018). Comparative advantages in Polish export to the European Union — food products vs selected groups of non-food products. Oeconomia Copernicana, 9(2), 287-308. doi:10.24136/oc.2018.015.

44. Treaty, L. (2012). Treaty on European Union and the Treaty on the Functioning of the European Union, Consolidated version of the Treaty on the Functioning of the European Union - Protocols – Annexes – Declarations annexed to the Final Act of the Intergove

45. Whyman, P. B., & Petrescu, A. I. (2017). The economics of Brexit: A cost-benefit analysis of the UK’s economic relationship with the EU. Springer.

46. Vitunskiene, V., & Serva, E. (2015). Shifts in Lithuania’s agri-food industry export competitiveness: a comparative analysis versus high- and medium-high technology manufacturing industries. Oeconomia Copernicana, 6(1), 7-31. doi:10.12775/OeC.2015.001.