Considering the importance of agriculture for economic development it is strongly supported by the governments around the world with the aim to improve productivity and to ensure a stable supply of food. In addition to providing food and other raw materials, it also provides employment opportunities and therefore represents the backbone of any economy.
Farming is highly weather dependent and extremely vulnerable to uncontrollable events such as natural disasters and agriculture also requires significant investment from producers in expensive equipment, inputs and labour before any profit can be made, and faces an obvious time delay between shifts in demand and supply. This is why everyone is subsidizing.
Subsidizing usually occurs:
- to make sure that enough food is produced to meet the needs
- to shield farmers from the effects of the weather and swings in world prices
- to preserve rural society.
Transparency is a very important instrument in order to specify eventually subsidies impacts on trade.
The CEFTA Parties have different programs and are strongly depend of characteristics and specificity of their individual agricultural policies, which are closely connected with the resources and production potentials which depend on it.
There are mainly two types of measures: income and market support measures and rural development programs (measures). Income and market support measures are orientated to support incomes of producers through to such called direct payments (coupled or decoupled) and (in the case of market measures) to overcome difficult market situations such as a sudden drop in demand due to a health scare, or a fall in prices as a result of a temporary oversupply on the market.
Rural development measures address the specific needs and challenges facing rural areas. These measures are created to improve preconditions for life in the rural areas, to help farmers to invest in order to modernize and improve productions, and to preserve rural areas.