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Exploring the Road to Agricultural Sustainability by Assessing the EU Debt Influencing Factors

Author

Listed:
  • Laura Brad

    () (The Department of Finance, The Bucharest University of Economic Studies, 5-7 Mihail Moxa Street, District 1, 010961 Bucharest, Romania)

  • Gabriel Popescu

    () (The Department of Agrifood and Environmental Economics, The Bucharest University of Economic Studies, 5-7 Mihail Moxa Street, District 1, 010961 Bucharest, Romania)

  • Alina Zaharia

    () (The Department of Agrifood and Environmental Economics, The Bucharest University of Economic Studies, 5-7 Mihail Moxa Street, District 1, 010961 Bucharest, Romania)

  • Maria Claudia Diaconeasa

    () (The Department of Agrifood and Environmental Economics, The Bucharest University of Economic Studies, 5-7 Mihail Moxa Street, District 1, 010961 Bucharest, Romania)

  • Daniela Mihai

    () (The Economics II Doctoral School, The Bucharest University of Economic Studies, Tache Ionescu Street, No.11, District 1, 010961 Bucharest, Romania)

Abstract

The importance of agricultural financing in ensuring food security and safety, jobs, poverty reduction, economic growth and more recently, climate change mitigation, natural resource conservation and sustainable development imposes periodic analysis of the factors which might influence the farmers’ financial situation, in order to improve it. One way of assessing this is to analyze the agricultural debt. In this context, based on previous models, the paper aims to assess the impact of specific factors on the agricultural debt level in the European Union during 2008–2015, as these should be considered in future common agriculture policies as well as in achieving sustainable agriculture. The research was conducted based on econometric techniques, by applying panel models in the Eviews 7.0 software-64 bit version. More than 20 variables were considered in the analysis. Some of the findings suggest that an increase in subsidies as well as the share of cash flow in the total existing capital would determine considerable reductions of the total debt. Decoupled subsidies seem to have a higher impact than coupled subsidies on short term debt, while its value is between the one found for coupled subsidies in the case of long term debt. Large farms/companies, to which decoupled payments are granted, have higher debts on long run and on total debt. The same units, to which coupled subsidies were granted, have smaller short-term debt. In contrast, the increases of labor costs, fixed costs, and crop/livestock costs lead to an increase in the total debt, since the farms require additional financial resources to cover the expanded costs. Also, the results suggest that short-term debts are mainly formed of long-term loans that reached maturity. In this case, the authors support the idea of differentiated financing programs for the agricultural activities because of their peculiarities and reinforced by the need to turn the intensive agriculture into a sustainable and plentiful one.

Suggested Citation

  • Laura Brad & Gabriel Popescu & Alina Zaharia & Maria Claudia Diaconeasa & Daniela Mihai, 2018. "Exploring the Road to Agricultural Sustainability by Assessing the EU Debt Influencing Factors," Sustainability, MDPI, Open Access Journal, vol. 10(7), pages 1-46, July.
  • Handle: RePEc:gam:jsusta:v:10:y:2018:i:7:p:2465-:d:157934
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    References listed on IDEAS

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    More about this item

    Keywords

    agricultural debt; cost; crops; livestock; payments; subsidies;

    JEL classification:

    • Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics
    • Q0 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General
    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation
    • Q3 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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