What is it about?

The study looks at how different revenue sources impact farm household income disparities in Hungary. Decomposing Gini coefficients by income source examines the policy change from market to government support on agricultural family income disparities. Off-farm income is consistent, yet it contributes to the inequality in farm household income. Pillar 1 for direct income support subsidies has become more important than Pillar 2 for rural development subsidies for farm revenue due to direct payments or specific area payments for crop output. A policy shift towards targeting farms in underserved areas, as well as a greater engagement of agri-environmental and other rural development payments, might explain a modest increase in Pillar 2 subsidies. The most striking findings include instabilities, a declining trend, and negative market revenue for the majority of farms. Pillar 1 subsidies fell as farm household income disparities expanded.

Featured Image

Why is it important?

Policy problems include reducing farmer income inequality. Public financial resources and budgetary expenditure patterns add to agricultural income disparity. Outside the European Union (EU), legal and institutional frameworks have been amended and market orientations strengthened to reduce farmer income disparity. Policy measures may vary depending on whether payments are decoupled from output, the share of market revenue and direct payments in total farm income, farm size, and market position.

Perspectives

A large reliance of farms on CAP subsidies and non-farming activities can be a boon for future development because they not only reduce farm income inequality among farms and rural areas, but they also keep farms alive, especially through restructuring and exit of less efficient and competitive farms.

Professor Imre Ferto
Centre for Economic and Regional Studies, Hungarian Academy of Sciences: Budapest

Read the Original

This page is a summary of: Do Subsidies Decrease the Farm Income Inequality in Hungary?, Agris on-line Papers in Economics and Informatics, June 2022, Czech University of Life Sciences Prague,
DOI: 10.7160/aol.2022.140204.
You can read the full text:

Read

Contributors

The following have contributed to this page