Impact of the Rural Development Programme Subsidies on the farms’ inefficiency and efficiencyá M. (2015): Impact of the Rural Development Programme Subsidies on the farms’ inefficiency and efficiency. Agric. Econ. – Czech, 61: 197-204.
download PDF
The aim of the paper is to assess the impact of subsidies from the Rural Development Programme of the Czech Republic for the years 2007–2013 (RDP) on the technical inefficiency and the efficiency of Czech agricultural holdings. An unbalanced panel includes 454 Czech farms and 2103 observations for years 2007–2013. The Parametric Stochastic Frontier Analysis is used to assess the technical inefficiency and efficiency. A “true” fixed effects model with RDP subsidies explaining the variance of the inefficiency term is estimated. The results are ambiguous. On one hand, the RDP subsidies contributed to the decrease of variance of the inefficiency term, but on the other, the effect is statistically significant only at 90% level of significance. Therefore, we further tested the medians of inefficiency (efficiency) which are lower (higher) in the subsidized farms. We concluded that there are statistically significant differences depending on whether the farm received the RDP subsidies or not. However, we suggest a further examination of the particular projects using the efficiency of investments indicators.
Aulová R. (2010): The impact of subsidies on agricultural enterprises capital structure choice. In: 19th International Scientific Conference on Agrarian Perspectives, Prague, Sept 14–15, 2010: 5–12.
Battese G. E., Coelli T. J. (1995): A model for technical inefficiency effects in a stochastic frontier production function for panel data. Empirical Economics, 20, 325-332
El Benni Nadja, Finger Robert (2013): The effect of agricultural policy reforms on income inequality in Swiss agriculture - An analysis for valley, hill and mountain regions. Journal of Policy Modeling, 35, 638-651
Bokusheva Raushan, Kumbhakar Subal C., Lehmann Bernard (2012): The effect of environmental regulations on Swiss farm productivity. International Journal of Production Economics, 136, 93-101
Bojnec Štefan, Latruffe Laure (2013): Farm size, agricultural subsidies and farm performance in Slovenia. Land Use Policy, 32, 207-217
Boudný J., Janotová B., Medonos T. (2011): Analýza efektivních a méně efektivních podniků. (Analysis of efficient and less efficient firms). Bulletin ÚZEI, 7: 1–28. Available at (accessed July 2014).
European Commission (EC) (2013): Regulation EU No. 1305/2013 on support for rural development by the European Agricultural Fund for Rural Development (EAFRD) and repeating Council Regulation (EC) No. 1698/2005. Official Journal of the European Union, L 347/487.
Fragoso R., Marques C., Lucas M.R., Martins M.B., Jorge R. (2011): The economic effects of common agricultural policy on Mediterranean montado/dehesa ecosystem. Journal of Policy Modeling, 33, 311-327
Greene W. (2002): Fixed and Random Effects in Stochastic Frontier Models. Stern School of Business, New York. Available at (accessed March 2014).
Jondrow James, Knox Lovell C.A., Materov Ivan S., Schmidt Peter (1982): On the estimation of technical inefficiency in the stochastic frontier production function model. Journal of Econometrics, 19, 233-238
Kroupová Z., Malý M. (2010): Analýza nástrojů zemědělské dotační politiky – aplikace produkčních funkcí. (Analysis of agricultural subsidies policy – application of production functions.) Politická ekonomie, 6: 774–794.
Kumbhakar Subal C., Tsionas Efthymios G., Sipiläinen Timo (2009): Joint estimation of technology choice and technical efficiency: an application to organic and conventional dairy farming. Journal of Productivity Analysis, 31, 151-161
Kumbhakar Subal C., Lien Gudbrand, Hardaker J. Brian (2014): Technical efficiency in competing panel data models: a study of Norwegian grain farming. Journal of Productivity Analysis, 41, 321-337
Malá Zdeňka, Červená Gabriela, Antoušková Michaela (): Analysis of the impacts of Common Agricultural Policy on plant production in the Czech Republic. Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, 59, 237-244
Pechrová M., Vlašicová E. (2013): Technical Efficiency of Organic and Biodynamic Farms in the Czech Republic. Agris on-line, 5: 143–152.
Pitt Mark M, Lee Lung-Fei (1981): The measurement and sources of technical inefficiency in the Indonesian weaving industry. Journal of Development Economics, 9, 43-64
Speelman S., D’Haese M., Buysse J., D’Haese L. (2008): A measure for the efficiency of water use and its determinants, a case study of small-scale irrigation schemes in North-West Province, South Africa. Agricultural Economics, 98: 31–39.
Timofti E., Memeţ D. (2012): Investments, subsidies and implementation of scientific and technological progress – a lever to enhace phytotechnical Branch efficiency. Scientific Papers Series Management, Economic Engineering in Agriculture and Rural Development, 12: 271–274.
Charles Vincent, Zegarra Luis Felipe (2014): Measuring regional competitiveness through Data Envelopment Analysis: A Peruvian case. Expert Systems with Applications, 41, 5371-5381
download PDF

© 2021 Czech Academy of Agricultural Sciences | Prohlášení o přístupnosti