Open AccessTHE EFFECT OF INCOME STABILISATION TOOL ON SLOVAK AGRICULTURE
Author(s) -
Andrea Boháčiková,
Tatiana Bencová,
Zuzana Kapustová
Publication year - 2020
Publication title -
international scientific conference eraz. knowledge based sustainable development
Language(s) - English
Resource type - Conference proceedings
ISSN - 2683-5568
DOI - 10.31410/eraz.s.p.2020.33
Subject(s) - agriculture , farm income , economic inequality , income support , slovak , income in kind , business , comprehensive income , agricultural economics , economics , inequality , public economics , gross income , geography , mathematical analysis , linguistics , philosophy , mathematics , archaeology , czech , state income tax , tax reform , macroeconomics
Managing income risk in agriculture is one of the important issues for farmers and policy makers nowadays. There exist a set of instruments and mechanisms for farmers to face the income volatility, including the individual or public support. Under II Pillar, the Common Agricultural Policy (CAP) offers the support for less favoured farms in the way of insurance, mutual fund, and Income stabilisation tool. The Income Stabilisation Tool (IST) represents the compensation to farmers for a “severe drop” in income, if the farm experienced an income loss of more than 30% compared to the 3-years average or the Olympic average of the preceding five-year income realizations. However, none of the EU countries has been currently using the tool operationally. The main objective of the paper is to investigate the potential effect of the Income Stabilisation Tool on mitigation of income risk in Slovak agriculture. The results of the paper show the existing possibility to improve financial situation and reduce the income inequality of particular Slovak farms in the future.