ARE AGRICULTURAL SUBSIDIES EFFICIENT TOOL FOR AGRICULTURAL SECTOR OF THE REPUBLIC OF MACEDONIA?
Keywords:
casual relationship, Republic of Macedonia, subsidiesAbstract
Over the years in the Republic of Macedonia, agricultural subsidies are enlisted as determinant of farm incomes, farm productivity and the overall national agricultural sector evident in her national budgets, grants and aids from the European Union. However, there is yet empirical fi ndings that evaluate the impact of agricultural subsidy on the performance of agricultural sector of the Republic of Macedonia. Therefore, this paper aimed at examining the causal relationship between agricultural subsidy and performance of agricultural sector, using time series data for the study obtained from State Statistical Offi ce and World Bank and analysed using Augmented Dickey Fuller and Pairwise Granger Causality Test. Also. We found that though the relationship between subsidies and agricultural development was not signifi cant, subsidies had a negative impact on agricultural productivity. This clearly refl ects the ineffi ciencies of government subsidization policy of the agricultural production.
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