A Winding Road From Investment Support to the Economic Growth of Farms: Evidence from Spatial Econometric Analysis of Agricultural Holdings in Slovenia

University of Ljubljana, Biotechnical Faculty, Chair for Agricultural Economics, Policy and Law, 1230 Domzale, Slovenia


TRAVNIKAR, T. and L. JUVANCIC, 2015. A winding road from investment support to the economic growth of farms: evidence from spatial econometric analysis of agricultural holdings in Slovenia. Bulg. J. Agric. Sci., 21: 16-25

This paper discusses the application of spatial econometric methods to analyse the effects of farm investment support and other relevant determinants affecting the economic performance of farms in Slovenia during the period 2007-2011. The analysis combines farm-level data from administrative sources (Common Monitoring and Evaluation Framework, Integrated Administrative and Control System) with secondary statistical data describing agricultural structures, socio-economic conditions and geographical conditions. Farm-level data are grouped, as the analysis is carried out at the municipality level (LAU 2). Factors affecting change in economic performance between 2007 and 2011 were analysed (i) from farms receiving investment support (ii), from all farms that applied for Common Agricultural Policy (CAP) measures during the analysed period and (iii) in relative terms, comparing supported farms with the entire farm population in analysed areas. Results show that farm investment support failed to increase revenues on supported farms. Instead, investment support only mitigated the general drop in farm revenues. Spatial analysis reveals the presence of spatial heterogeneity of effects on supported farms, while the economic performance of the farming population is spatially correlated.

Key words: Rural Development Policy 2007-2013, farm investment support, agricultural economic growth, spatial models
Abbreviations: EU (European Union); CAP (Common Agricultural Policy); RDP (Rural Development Policy); CMEF (Common Monitoring and Evaluation Framework); SO (standard output); OLS (ordinary least squares); ESDA (exploratory spatial data analysis); LISA (local indicators of spatial association); LM (Lagrange Multiplier); UAA (utilised agricultural area); LSU (livestock unit); PP (payment rights).

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