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A microeconomic model for subsidies allocation: The case of Belarus

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  • Svetlov, Nikolay M.
  • Kazakevich, Iryna A.

Abstract

The paper develops a microeconomic methodological framework that allows approaching subsidy allocation across the types of assets and impact of subsidies on agricultural outputs and profits. The methodology is based on a non-parametric production frontier estimation. The empirical application is made to 1084 Belarusian corporate farms. The results suggest targeting governmental support at grain and milk production. In this case, 4.14 trillion Belarusian roubles of subsidies increase the overall profit of the sample farms by 1.46 trillion. In the case of targeting, the farms with higher overall efficiency are more sensitive to the support and are able to absorb larger amount of subsidies. The opposite is true in the absence of targeting.

Suggested Citation

  • Svetlov, Nikolay M. & Kazakevich, Iryna A., 2010. "A microeconomic model for subsidies allocation: The case of Belarus," IAMO Forum 2010: Institutions in Transition – Challenges for New Modes of Governance 52701, Leibniz Institute of Agricultural Development in Central and Eastern Europe (IAMO).
    • Handle: RePEc:zbw:iamo10:52701
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    References listed on IDEAS

    as
    1. Svetlov, Nikolai & Hockmann, Heinrich, 2005. "Technical and economic efficiency of Russian corporate farms: the case of the Moscow region [Determinatnten der technischen und ökonomischen Effizienz von landwirtschaftlichen Betrieben in Russland," IAMO Discussion Papers 84, Leibniz Institute of Agricultural Development in Transition Economies (IAMO).
    2. Polterovich, Victor, 2007. "Institutional Trap," MPRA Paper 20595, University Library of Munich, Germany.
    3. Svetlov, Nikolai M., 2009. "Estimating internal transaction costs: the case of corporate dairy farms in Russia’s Moscow oblast," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 58(08), pages 1-8, November.
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    More about this item

    Keywords

    Microeconomic model; data envelopment; subsidies; Belarus;
    All these keywords.

    JEL classification:

    • K10 - Law and Economics - - Basic Areas of Law - - - General (Constitutional Law)
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis

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