EFFECTS OF AGRICULTURAL SUBSIDIES ON INCOME RISK IN LITHUANIAN DAIRY FARMS | Zendy

Imre Fertő | Zendy; Aldona Stalgienė | Zendy

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EFFECTS OF AGRICULTURAL SUBSIDIES ON INCOME RISK IN LITHUANIAN DAIRY FARMS

Author(s) -

Imre Fertő,

Aldona Stalgienė

Publication year - 2016

Publication title -

management theory and studies for rural business and infrastructure development

Language(s) - English

Resource type - Journals

eISSN - 2345-0355

pISSN - 1822-6760

DOI - 10.15544/mts.2016.27

Subject(s) - lithuanian , subsidy , agriculture , revenue , farm income , economics , agricultural economics , business , market liquidity , income support , agricultural science , finance , geography , philosophy , linguistics , environmental science , archaeology , market economy , macroeconomics

The aim of the paper is to investigate the effects of agricultural subsidies on income variabilityof Lithuanian dairy farms. In addition, the observed heterogeneity in income risks acrossfarms and time is explained in terms of farm characteristics. It was employed balanced farm-levelpanel data of the Lithuanian farm accountancy network (FADN) was used to construct coefficientsof variation of five-year gross farm revenues over the period 2010 to 2014. Various econometricmodels are applied to measure the effect of off-farm income, total subsidies, farm size, and financialimmobility on the variability of gross farm incomes. Estimations suggest that agricultural subsidies,liquidity have positive impact on income risk. The age of farmers negatively influences the incomerisk. There is non-linear relationship between farm size and income risk.

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