The impact of direct payments on the activity results of agricultural producers

Abstract

Direct payments are one of the most important measure of the Common Agricultural Policy because of majority financial resources allocated for them. Direct payments guarantee minimum income to agricultural producers because of fluctuation agricultural products price in the markets. Regarding relatively large financial resources, it important to assess the impact of direct payments to agricultural producers according to farm size and type of farming. The purpose of the paper is to assess the impact of direct payments to results of agricultural activity. The methods used are as follows: systematic analyses of scientific literature, comparison, generalization and graphical methods, regression analysis. In the paper the overview of scientific literature related to the impact of direct payments to agricultural producers, analysis of the influence of direct payments to agricultural activity both in EU countries, focusing the attention to Lithuanian agriculture is carried out. The results of regression analysis concerning the direct payments impact to different agricultural activity results according to the farm size and farming type are outlined.

JEL codes: C25, E01, Q12, Q18.