Are Agricultural Subsidies Efficient Tool for Agricultural Sector of the Republic of Macedonia?

1 Szent Istvan University, Faculty of Economics and Social Sciences, Doctoral School for MBA, 2100 Godollo, Hungary
2 Ss.Cyril and Methodius University, Faculty of Agricultural Sciences and Food, Institute for Agroeconomics, 1000 Skopje, Republic of Macedonia


Trendov, N. M., O. Kehinde and P. Mile, 2017. Are agricultural subsidies effi cient tool for agricultural sector of the Republic of Macedonia? Bulg. J. Agric. Sci., 23 (3): 363–369

Over the years in the Republic of Macedonia, agricultural subsidies are enlisted as determinant of farm incomes, farm productivity and the overall national agricultural sector evident in her national budgets, grants and aids from the European Union. However, there is yet empirical fi ndings that evaluate the impact of agricultural subsidy on the performance of agricultural sector of the Republic of Macedonia. Therefore, this paper aimed at examining the causal relationship between agricultural subsidy and performance of agricultural sector, using time series data for the study obtained from State Statistical Offi ce and World Bank and analysed using Augmented Dickey Fuller and Pairwise Granger Causality Test. Also. We found that though the relationship between subsidies and agricultural development was not signifi cant, subsidies had a negative impact on agricultural productivity. This clearly refl ects the ineffi ciencies of government subsidization policy of the agricultural production.

Key words: casual relationship; Republic of Macedonia; subsidies
Abbreviations: ADF – Augmented Dickey Fuller, CAP – European Common Agricultural Policy, CEFTA – Central European Free Trade Agreement, EU – European Union, GVA – Gross value added, IPARD – Instrument for Preaccession Assistance for Agriculture and Rural Development, MAFWE – Ministry of Agriculture Forestry and Water Economy, SSO – State Statistical Offi ce, UAA – Utilized Agricultural Area, WTO – World Trade Organisation

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