Decomposition of variations of direct payments rates on the example of selected support instruments applied in Poland

Abstract

In this paper, an original analysis of the direct payment rate shaping mechanism – in terms of the process and from the perspective of game theory – has been carried out. The factors determining the direct payments rates were identified. The results of measuring the impact of these factors on payments rates fluctuations were presented. The territorial scope of the study is Poland. The time range covers the years 2016–2020. The objective scope of the analysis includes four direct support instruments. It was found that the rates of sectoral area payments vary to a greater extent than the rates of general payments due to fluctuations in the area approved for a payment. The findings of this study can be used to develop a method for predicting payments rates based on the analysis of the fundamental factors. The prediction of payments rates could be used to support decision-making processes in agricultural policy. Therefore, the research results involving the decomposition of payments rates are of significant practical value in addition to their cognitive significance.