Key Problems of Using Subsidies Coupled with Agricultural Production

Herda-Kopańska Justyna () and Kulawik Jacek ()
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Herda-Kopańska Justyna: MSc, Institute of Agricultural and Food Economics National Research Institute, Department of Finance and Risk Management, ; ul. Świętokrzyska 20, 00-002, Warsaw, Poland
Kulawik Jacek: PhD, DSc, ProfTit, Institute of Agricultural and Food Economics National Research Institute, Department of Finance and Risk Management, ; ul. Świętokrzyska 20, 00-002, Warsaw, Poland

Zagadnienia Ekonomiki Rolnej / Problems of Agricultural Economics, 2022, vol. 372, issue 3, 21-44

Abstract: Subsidies based on agricultural production are a common form of subsidies in many countries, both less developed (due to their economic difficulties in achieving a satisfactory level of food self-sufficiency) and highly developed. However, at the turn of the 20th and 21st centuries, this support was not so popular. It was only in the second decade that it began to be restored, which is sometimes referred to as recoupling. The COViD-19 pandemic and the Ukrainian–Russian war are undoubtedly two important circumstances that have increased interest in these subsidies. Therefore, it is important to identify theoretical and socio-political justifications for using these subsidies and the problems related to preparing schemes for determining their unit rates. After conducting the analysis, it turned out that the microeconomic theory rather provides arguments against the wide use of agricultural production subsidies. The justifications for pursuing a policy which refers to the difficulties in particular sectors of agriculture are also unconvincing. The calculation of unit payment rates is a challenge due to the lack of a solid methodology and sufficiently reliable source data.

Keywords: subsidies coupled with agricultural production; voluntary coupled support; calculation of unit payment rates (search for similar items in EconPapers)
JEL-codes: Q12 Q13 Q14 Q18 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:zerpae:v:372:y:2022:i:3:p:21-44:n:3

DOI: 10.30858/zer-152475

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