Perceived and “Real†Importance of Subsidies for Agricultural Enterprises in Post-Communist EU Countries

Thirty years after the fall of the inefficient communist-run economy, the agriculture of the European Union’s Eastern states is still heavily dependent on external financial aid, which is currently forming tools for supporting the development of agriculture and rural areas of the Common Agricultural Policy. This contribution aims to assess the significance of government subsidies from the farmer’s point of view and their relevance for agricultural enterprise management, using the example of the Czech Republic. To do so, 60 interviews with farmers and analyses of the management of 10 enterprises over the past 10 years were used. According to the findings, it can be concluded that a substantial number of farmers view these subsidies as a purely commercial instrument intended to assist them in running their operations. The emphasis on rural development or food security is minimal. Subsidies are a discussion topic mainly for small-scale farmers who envy the large amounts of subsidies received by their large-scale counterparts; thus, dissatisfaction and perceived injustice resonate significantly among most farmers. A look at economic data completely contradicts these views; however, subsidies play the most important role for small businesses, constituting up to four times their assets. As for the amount of subsidies received, they do increase according to the company’s size, but this increase is logarithmic and not linear. A deep discrepancy in the perception and reality of the meaning of subsidies was thus identified as an important element of dissatisfaction in post-socialist agriculture.