Management Theory and Studies for Rural Business and Infrastructure Development, Volume 35, Number 2

The determination of direct payments‘ level across EU according to the production costs in agriculture

Artiom Volkov, Jolanta Droždz

Abstract

The paper assessed the cost of agricultural production in EU Member States, in order to submit proposals for a possible value of direct payments in Lithuania since 2014. The paper analysed the production cost structure in agriculture, highlighting the key elements that affect farmers' performance. Classification of production costs in agriculture introduced. It enabled the comparison of objectively evaluated farming conditions among farms with various specializations. In addition, labour cost in agriculture and farmland prices in the EU member states were analysed. Multiple methods of production costs assessment as well, as European Commission's overall financial envelope for direct payments in the new programming period of 2014, were taken into account.

JEL codes: Q12, Q18, D24.

Keyword(s): direct payments, common agricultural policy, production costs, agriculture


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Management Theory and Studies for Rural Business and Infrastructure Development eISSN 2345-0355

This journal is published under the terms of the Creative Commons Attribution-Noncommercial 3.0 Unported License. Responsible editor: Dr Audrius Gargasas.