What is it about?
The effect of subsidies on the performance of farms has received a great deal of attention in the literature, although results are inconclusive. Furthermore, much of the related literature examines the effect of subsidies only on technical efficiency (TE). We examine the effect of different types of subsidies (investment, less favoured area (LFA) and agro-environmental (AE) subsidies) on the different components of total factor productivity (TFP) in Slovenia.
Photo by Jan Schneider on Unsplash
Why is it important?
Previous research examining the effect of agricultural subsidies typically neglects the effect of technological heterogeneity when calculating TE or TFP and attributed differences in the production environment or technology to differences in TE or TFP. However, several studies have shown at both a macro- and micro level. that the assumption of homogeneous technologies might lead to biased efficiency and/or productivity estimates, and therefore inadequate policy recommendations.We estimate models taking into account these defficiences. Our findings suggest that the rural development (RD) subsidies we examine here do not significantly affect overall farm productivity as measured by TFP.
Read the Original
This page is a summary of: The Effect of Investment, LFA and Agri‐environmental Subsidies on the Components of Total Factor Productivity: The Case of Slovenian Farms, Journal of Agricultural Economics, April 2020, Wiley, DOI: 10.1111/1477-9552.12374.
You can read the full text:
The following have contributed to this page