Agricultural Subsidies’ and Environmental Effects of agricultural productivity (the case of Kosovo)
In Kosovo, the subsidies for agricultural sector serve as determinant and evident for farm productivity, generating household incomes and approach to the Common Agricultural Policy (CAP) and European Union (EU) farming level. No previous research works evaluated and measured the impact and contribution of the agriculture subsidies on the agri-food sector in Kosovo. Purpose of this paper is to examining the causal relationship between agricultural subsidy and the progress of agricultural sector development, using time series data from the Kosovo Statistical Agency (KAS) and the Green Report. To get the results, Augmented Dickey Fuller (ADF) and Pairwise Granger Causality Test were used in this research. The authors find out, not significant relationship between subsidies and agricultural development, where subsidies have a negative impact on the agricultural productivity. As a recommendation for the government, authors strongly advice equal and transparent distribution of the agricultural subsidies to get positive impact on long term.
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