What is it about?
This study delves into why Estonian farms made investment decisions between 2006 and 2019, post their transition to a market economy and EU accession. the findings reveal that farm investments were positively influenced by increased sales, investment subsidies, and cash flow.
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Why is it important?
What's interesting is that, when breaking down the cash flow into two parts—volatile market income and stable farm subsidies—it was found that farm investments were more dependent on the stable farm subsidies rather than the fluctuating market income. This suggests that credit rationing in EU agriculture may be tied more to farm subsidies than the income generated from markets.
Perspectives
This research provides a unique perspective on the dynamics of farm investment behavior.
Professor Imre Ferto
Centre for Economic and Regional Studies, Hungarian Academy of Sciences: Budapest
Read the Original
This page is a summary of: Investments, subsidies and financial constraints in Estonian agriculture, Agricultural Finance Review, August 2023, Emerald,
DOI: 10.1108/afr-10-2022-0132.
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