Contribution of Supports to Modernisation for Enhancing Competitiveness of the Czech Agricultural and Forestry Holdings

Specific weaknesses of the Czech agriculture are “longstanding under-capitalization and credit burden on business, low level of support and market protection in comparison with other European countries prior accession to the EU and low level of financial means in the agricultural sector during the transformation process.” (Ministry of Agriculture, 2010) These factors are limiting the competitiveness of Czech farms. One of the ways how to combat these disadvantages is to invest to the modernisation of the agricultural sector, support innovations and their transmission into practice. Czech Republic can benefit from the European Agricultural Fund for Rural Development (EAFRD) under established Rural Development Programme (RDP). First priority axis of this program is devoted to increasing of competitiveness of agriculture and forestry. Measure I.1.1 Modernisation of agricultural holdings is aimed on investment promoting and improving the overall performance of the farm to increase its competitiveness. Measure I.1.2 Increasing of the economic value of forests has the same objective, but aims on forestry companies. The mid-term evaluation of the RDP evoked the question if the subsidised investments had contributed to the introduction of new products or services and technologies by the enterprises. The aim of this article is to answer the question if the subsidies on modernisation from the EU’s funds have statistically significant impact on the introduction of new technologies or products by agricultural holdings and thus enhancing their competitiveness. On the basis of performed statistical hypothesis testing, the author came to the conclusion that subsidies into modernisation of the agricultural and forestry holdings statistically significantly contributed to the introduction of new technologies and innovations.