Contribution of subsidies to the profitability of crop farms

Peter Borisov, Teodor Radev, Boryana Ivanova

Abstract: The article examines the relationship between paid subsidies and achieved revenues in crop farms. Through regression analysis, we examine the correlation between subsidies as dependent variable and gross margin, net income and profitability of subsidies as results. We evaluate and determine the effect of subsidies and what is their impact on the profitability of farms. The results of the regression analysis suggest that subsidies lead to the significant increase of farm income and improvement of the quality of agricultural products. Farmers increase the share of received subsidies in investments willing to follow the good practices in farming.

Keywords: crop farms; gross margin; subsidies; subsidy efficiency

Date published: 2019-02-28