A Microeconomic Model for Subsidies Allocation: the Case of Belarus

Nikolai M. Svetlov and Iryna A. Kazakevich

No 90826, 2010 IAMO Forum, June 16-18, 2010, Halle (Saale), Germany from Institute of Agricultural Development in Transition Economies (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: Agricultural and Food Policy; Institutional and Behavioral Economics; Political Economy (search for similar items in EconPapers)
Pages: 15
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Persistent link: https://EconPapers.repec.org/RePEc:ags:iamo10:90826

DOI: 10.22004/ag.econ.90826

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