RESEARCH PAPER
KEY PROBLEMS OF USING SUBSIDIES COUPLED WITH AGRICULTURAL PRODUCTION
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Institute of Agricultural and Food Economics - National Research Institute
Submission date: 2022-05-30
Final review date: 2022-07-14
Acceptance date: 2022-07-28
Publication date: 2022-09-29
Zagadnienia Ekonomiki Rolnej / Problems of Agricultural Economics 2022;372(3):21-44
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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 U krainian–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.