A microeconomic model for subsidies allocation: The case of Belarus

Nikolai Svetlov and Iryna A. Kazakevich

IAMO Forum 2010: Institutions in Transition – Challenges for New Modes of Governance from Leibniz Institute of Agricultural Development in Central and Eastern Europe (IAMO)

Abstract: The paper develops a microeconomic methodological framework that allows approaching subsidy allocation across the types of assets and impact of subsidies on agricultural outputs and profits. The methodology is based on a non-parametric production frontier estimation. The empirical application is made to 1084 Belarusian corporate farms. The results suggest targeting governmental support at grain and milk production. In this case, 4.14 trillion Belarusian roubles of subsidies increase the overall profit of the sample farms by 1.46 trillion. In the case of targeting, the farms with higher overall efficiency are more sensitive to the support and are able to absorb larger amount of subsidies. The opposite is true in the absence of targeting.

Keywords: Microeconomic model; data envelopment; subsidies; Belarus (search for similar items in EconPapers)
JEL-codes: C61 K10 (search for similar items in EconPapers)
Date: 2010
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:iamo10:52701

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