What is it about?
The transformation of agriculture, agricultural support, credit and rural finance systems in the Central and Eastern Europe have been complex undertakings. Investments play an important role in the process of agricultural and farm modernization and restructuring, and they can be driven by subsidies on investment, This paper investigates the investment behaviour of dairy farms in Estonia, Hungary and Slovenia.
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Why is it important?
This study focuses on whether soft budget constraints persists (SBC), and how it varies between countries with different dairy farming structures and historical-institutional legacies in the new context of Common Agricultural Policy (CAP) subsidies in the post-EU accession period. The importance of CAP investment subsidies and SBC-related differences among the countries under study were confirmed, while the investment decisions of dairy farms were found to be constrained by the availability of finance.
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This page is a summary of: The investment behaviour of dairy farms in transition economies, Baltic Journal of Economics, January 2021, Taylor & Francis, DOI: 10.1080/1406099x.2021.1920754.
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