INTERVENTION IN AGRICULTURE IN TERMS OF ECONOMIC FLUCTUATIONS – THE CASE OF THE EUROPEAN UNION MEMBER STATES

Abstract

In this article, the Authors attempt to evaluate whether the interventions in the agricultural sector in the European Union Member States is justified by the economic situation in the sector. There is a thesis, according to which subsidies received by agricultural producers do not serve in correcting the economic situation of farms resulting in the dynamics of prices. The study was conducted in the period 2005–2011. It is based on the analysis of correlation between indicators of support for agriculture published by the World Bank and the synthetic indicator of economic situation estimated on the basis of earned/lost revenue due to changes in prices of agricultural products. Conclusively, contemporary intervention in the agricultural sector in the EU Member States remains in isolation from changes in the economic situation. This makes the current objective of the Common Agricultural Policy not to stabilize markets, but to provide an adequate level of income to the owners of farms, which is carried out by the rents obtained for the provision of nonproduction services and political rents.

Keywords

• economic situation
• agriculture
• intervention
• political rent