An Analysis of the Cost of the Supporting and Guarantee Agricultural and Forestry Fund (SGAFF) in the Czech Republic

Karel Janda

Czech Journal of Economics and Finance (Finance a uver), 2006, vol. 56, issue 09-10, 416-434

Abstract: The paper analyzes the cost to the Czech state budget of the Supporting and Guarantee Agricultural and Forestry Fund (SGAFF). In the empirical part of the paper, the author shows that the SGAFF portfolio has sufficient value to cover the expected costs of the credit guarantees and subsidies offered by the fund. The theoretical model looks at government interventions designed to decrease the credit rationing of farmers with high probability of success. The theoretical model shows that, with uniform non-targeted supports, the Czech government unambiguously prefers lump-sum guarantees to interest-rate subsidies. With support targeted wholly to disadvantaged farmers, the cost of lump-sum guarantees, proportional guarantees, and interest-rates subsidies are all equal.

Keywords: credit; guarantees; subsidies; transition (search for similar items in EconPapers)
JEL-codes: D82 G28 P31 (search for similar items in EconPapers)
Date: 2006
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Persistent link: https://EconPapers.repec.org/RePEc:fau:fauart:v:56:y:2006:i:9-10:p:416-434

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