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Analysis of distribution impact of subsidies within the Common Agricultural Policy on field production businesses in the Czech Republic

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  • Gabriela Trnková

    (Katedra ekonomiky, Provozně ekonomická fakulta, Česká zemědělská univerzita v Praze, Kamýcká 129, Praha 6, 165 21, Česká republika)

  • Z. Malá

    (Katedra ekonomiky, Provozně ekonomická fakulta, Česká zemědělská univerzita v Praze, Kamýcká 129, Praha 6, 165 21, Česká republika)

Abstract

The article deals with the analysis of inequality in the distribution of the economic result in businesses engaging in field production in the Czech Republic, by way of the assessment of the impact of subsidies on the said inequality and by defining the effect of the size of the business on the economic result as well as inequality. The methodical tool is the quantification of the Gini coefficient and its elasticity. The data basis consists of panel data of 140 agricultural businesses focusing on field production for the period of the years 2005-2010.The main results of the submitted article substantiate a high inequality in the distribution of the economic result for the accounting period among field production businesses. The said inequality is not generally caused by the differing size of the analyzed businesses, and the associated volume of subsidies obtained, but is affected by other factors, such as the management quality, the investment activity of the business, or exceptional events. Subsidies do contribute to the more equal distribution of the economic result, but their impact is very small. Out of the individual categories of subsidies, the ones with the main redistribution effect are direct payments, as a result of the high proportion of total subsidies that they comprise.

Suggested Citation

  • Gabriela Trnková & Z. Malá, 2012. "Analysis of distribution impact of subsidies within the Common Agricultural Policy on field production businesses in the Czech Republic," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 60(7), pages 415-424.
    • Handle: RePEc:mup:actaun:actaun_2012060070415
    DOI: 10.11118/actaun201260070415
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    References listed on IDEAS

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    1. Mary Keeney, 2000. "The Distributional Impact of Direct Payments on Irish Farm Incomes," Journal of Agricultural Economics, Wiley Blackwell, vol. 51(2), pages 252-265, May.
    2. Deppermann, Andre & Grethe, Harald & Offermann, Frank, 2010. "Farm level effects of EU policy liberalization: Simulations based on an EU-wide agricultural sector model and a supply model of the German agricultural sector," 114th Seminar, April 15-16, 2010, Berlin, Germany 61083, European Association of Agricultural Economists.
    3. Catherine Moreddu, 2011. "Distribution of Support and Income in Agriculture," OECD Food, Agriculture and Fisheries Papers 46, OECD Publishing.
    4. Mishra, Ashok & El-Osta, Hisham & Gillespie, Jeffrey M., 2009. "Effect of agricultural policy on regional income inequality among farm households," Journal of Policy Modeling, Elsevier, vol. 31(3), pages 325-340, May.
    5. Henningsen, Arne & Kumbhakar, Subal C. & Lien, Gudbrand D., 2009. "Econometric Analysis of the Effects of Subsidies on Farm Production in Case of Endogenous Input Quantities," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49728, Agricultural and Applied Economics Association.
    6. Paul Allanson, 2003. "CAP Reform and the Distribution of Farm Income in Scotland {Revised}," Dundee Discussion Papers in Economics 147, Economic Studies, University of Dundee.
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