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Subsidies’ Impacts on Technical–Economic Indicators in Large Crop Farms

Author

Listed:
  • Stoicea Paula

    (Faculty of Management and Rural Development, University of Agronomic Sciences and Veterinary Medicine of Bucharest, 59 Mărăști Boulevard, 011464 Bucharest, Romania)

  • Tudor Valentina Constanța

    (Faculty of Management and Rural Development, University of Agronomic Sciences and Veterinary Medicine of Bucharest, 59 Mărăști Boulevard, 011464 Bucharest, Romania)

  • Stoian Elena

    (Faculty of Management and Rural Development, University of Agronomic Sciences and Veterinary Medicine of Bucharest, 59 Mărăști Boulevard, 011464 Bucharest, Romania)

  • Micu Marius Mihai

    (Faculty of Management and Rural Development, University of Agronomic Sciences and Veterinary Medicine of Bucharest, 59 Mărăști Boulevard, 011464 Bucharest, Romania)

  • Soare Elena

    (Faculty of Management and Rural Development, University of Agronomic Sciences and Veterinary Medicine of Bucharest, 59 Mărăști Boulevard, 011464 Bucharest, Romania)

  • Militaru Dan Ciprian

    (Faculty of Management and Rural Development, University of Agronomic Sciences and Veterinary Medicine of Bucharest, 59 Mărăști Boulevard, 011464 Bucharest, Romania)

Abstract

The objective of the analysis is to quantify the impact of subsidies on the activity of two large farms of 600 ha and 3000 ha, respectively. The innovative solution from this analysis is to create a model that can be used at the macroeconomic level, showing the possible ways in which these large farms can secure their incomes. To study the use of these subsidies, the methods of technical–economic analysis, economic–financial analysis and statistical analysis of the data were used. Descriptive statistics, visual inspection and basic comparative methods were used to determine the statistical patterns of subsidy impact and variation for each crop. In this context, this is evidence of the possibility of probable expansion of crop income and profitability. The results were different for the two arable farms studied. The results for the 600 ha arable farm suggested that the statistical model was inconclusive due to the annual adjustment of the cropping plan and the impossibility of making viable forecasts, especially since the ecological performance fluctuated (in 2020 the farm was on the verge of profitability), although the positive impact of subsidies was evident in loss-making years. For the 3000 ha arable farm, the statistical model was relevant because it highlighted crops (corn and soybeans) that consistently contributed to good and increasing income and economic performance, as well as highlighting the significant impact of subsidies. The conclusions of the study emphasize the indispensability of subsidies for large farms and the contribution of crops to income generation. These conclusions provide a valuable source of information for relevant policy decisions and can guide future research aiming to increase the profitability of these farms and allocate resources appropriately and efficiently in the agricultural sector.

Suggested Citation

  • Stoicea Paula & Tudor Valentina Constanța & Stoian Elena & Micu Marius Mihai & Soare Elena & Militaru Dan Ciprian, 2023. "Subsidies’ Impacts on Technical–Economic Indicators in Large Crop Farms," Agriculture, MDPI, vol. 13(9), pages 1-17, August.
    • Handle: RePEc:gam:jagris:v:13:y:2023:i:9:p:1712-:d:1228739
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    References listed on IDEAS

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    1. Katharine Heyl & Felix Ekardt & Lennard Sund & Paula Roos, 2022. "Potentials and Limitations of Subsidies in Sustainability Governance: The Example of Agriculture," Sustainability, MDPI, vol. 14(23), pages 1-26, November.
    2. Cecilia ALEXANDRI & Corina SAMAN & Bianca PAUNA, 2021. "Exploring the Relationship Between Farm Productivity and CAP Subsidies for the NMS," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(4), pages 124-140, December.
    3. Richard L. Meyer, 2011. "Subsidies as an Instrument in Agriculture Finance : A Review," World Bank Publications - Reports 12696, The World Bank Group.
    4. Cecilia ALEXANDRI & Bianca PAUNA & Corina SAMAN, 2020. "The Relationship Between Total Factor Productivity and Subsidies in the Case of Romanian Farms," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(4), pages 85-98, December.
    5. Nadine McCloud & Subal C. Kumbhakar, 2008. "Do subsidies drive productivity? A cross-country analysis of Nordic dairy farms," Advances in Econometrics, in: Bayesian Econometrics, pages 245-274, Emerald Group Publishing Limited.
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