Do the subsidies help the young farmers? The case study of the Czech Republic

Abstract

To ensure the generation renewal in the European Union there are subsidies for setting up of young farmers' businesses and the retirement scheme and top-up direct payments. In the Czech Republic are provided subsides to interest rates with preference of young farmers and intergenerational succession of the farm is tax-free. Together with other incentives, those factors shall facilitate enter of young people to the sector. The aim of the paper is to assess whether the policy measures help the young farmers with setting-up of their business. Based on the primary survey on 510 young Czech farmers the most motivating for enter the sector were tax relief on transfer of the holding and top-up payment for young farmers. The farmers without background considered as sufficiently motivating the top-up payments more often than those with certain background who acknowledged more the top-up subsidies. Possible way how to facilitate the enter to the sector could be to keep the tax relief on farm transfer, to combine the measures for retirement and setting up of young farmers and provide investment subsidies or financial instruments for start-up. Top-up payments, despite motivational according to the farmers, are criticized as inefficient.