The impact of direct payments on the activity results of agricultural producers

Abstract

Direct payments are one of the most important measure of the Common Agricultural Policy because of majority financial resources allocated for them. Direct payments guarantee minimum income to agricultural producers because of fluctuation agricultural products price in the markets. Regarding relatively large financial resources, it important to assess the impact of direct payments to agricultural producers according to farm size and type of farming. The purpose of the paper is to assess the impact of direct payments to results of agricultural activity. The methods used are as follows: systematic analyses of scientific literature, comparison, generalization and graphical methods, regression analysis. In the paper the overview of scientific literature related to the impact of direct payments to agricultural producers, analysis of the influence of direct payments to agricultural activity both in EU countries, focusing the attention to Lithuanian agriculture is carried out. The results of regression analysis concerning the direct payments impact to different agricultural activity results according to the farm size and farming type are outlined.

Agriculture’s Impact for the Economy: Inter-Industry Linkages and Multiplier Effects

“…The most studies are focused on evaluating direct impact of various policy instruments on agricultural activity, its intensity and income rather than its impact for overall regional economic development and demand changes in other sectors. For example, Kripaitis et al (2014) analyzed direct payments impact for employment and spending in agricultural sector; Vitunskiene and Baltusiene (2013) measured farmers income before and after joining the EU; Volkov and Drozdz (2016) evaluated the extent to which the CAP 2004-2013 direct payment scheme has contributed to the changes of viability and economic attractiveness of different types of farming in Lithuania; Ferto and Stagliene (2016) investigated the effects of agricultural subsidies on income variability of Lithuanian dairy farms suggesting that agricultural subsidies have positive impact on income risk. Indirect effects of agriculture sector to other sectors were not involved in recent studies.…”