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Do coupled subsidies increase milk productivity, land use, herd size and income? Evidence from Kosovo

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  • Bajrami, Egzon
  • Wailes, Eric J.
  • Dixon, Bruce L.
  • Musliu, Arben
  • Durand-Morat, Alvaro

Abstract

This study assesses the effectiveness of the Subsidy per Head Scheme (SPHS) in increasing milk productivity, land use, herd size and income in dairy farms across the seven regions of Kosovo. SPHS represents one of the largest coupled subsidy programs in the agricultural sector of Kosovo in terms of farmer participation and budget allocation. We use a Propensity Score Matching approach to assess the impact of this program by comparing a group of participants with a group of non-participants during the 2013–2014 farming seasons. We test the robustness of the impact results using four different matching algorithms. Results reveal SPHS was not effective in increasing land use, gross income and farm size (number of cows), although SPHS had a limited impact on improving milk productivity. In addition, the study highlights the need to reformulate coupled subsidies and develop new, complementary strategies that address farmers’ needs more efficiently.

Suggested Citation

  • Bajrami, Egzon & Wailes, Eric J. & Dixon, Bruce L. & Musliu, Arben & Durand-Morat, Alvaro, 2019. "Do coupled subsidies increase milk productivity, land use, herd size and income? Evidence from Kosovo," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 121(3), pages 134-143.
    • Handle: RePEc:zbw:espost:265236
    DOI: 10.7896/j.1913
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    References listed on IDEAS

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    2. Bajrami, Egzon & Wailes, Eric & Dixon, Bruce & Musliu, Arben, 2016. "Are dairy subsidies effective to increase milk productivity and income in Kosovo? A Propensity Score Matching Approach," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235839, Agricultural and Applied Economics Association.
    3. Joe Dewbre, 2006. "The Impact of Coupled and Decoupled Government Subsidies on Off-Farm Labor Participation of U.S. Farm Operators," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(2), pages 393-408.
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    7. Becerril, Javier & Abdulai, Awudu, 2010. "The Impact of Improved Maize Varieties on Poverty in Mexico: A Propensity Score-Matching Approach," World Development, Elsevier, vol. 38(7), pages 1024-1035, July.
    8. King, Gary & Nielsen, Richard, 2019. "Why Propensity Scores Should Not Be Used for Matching," Political Analysis, Cambridge University Press, vol. 27(4), pages 435-454, October.
    9. Guan Zhengfei & Alfons Oude Lansink, 2006. "The Source of Productivity Growth in Dutch Agriculture: A Perspective from Finance," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(3), pages 644-656.
    10. Henningsen, Arne & Kumbhakar, Subal C. & Lien, Gudbrand D., 2009. "Econometric Analysis of the Effects of Subsidies on Farm Production in Case of Endogenous Input Quantities," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49728, Agricultural and Applied Economics Association.
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    Cited by:

    1. Bajrami, Egzon, 2024. "Evaluating the agricultural policy in Kosovo: Lessons learnt and the pathway forward," EconStor Theses, ZBW - Leibniz Information Centre for Economics, number 299140.

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    JEL classification:

    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

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