Direct budget subsidizing as a factor of sustainable development of agricultural production in the Republic of Belarus

Abstract

Currently, most of the world’s countries are pursuing an active agrarian policy in order to support national agricultural producers. At the same time, the ongoing changes in the global and domestic food markets, due to rising prices, reduction in the product range, and social tension in society require optimization of costs of the country’s budgets and development of proposals for the most effective measures. The paper presents an analysis of methodological approaches to assessing the efficiency of direct budget support for agricultural production used in the member states of the Eurasian Economic Union (EAEU) and in Organization for Economic Cooperation and Development (OECD). Taking into account the identified advantages and disadvantages of applying these approaches in practice in the Republic of Belarus, as well as using the experience of the EAEU member states, methodological approaches have been developed to assess the efficiency of state support measures aimed at subsidizing of: 1) compensation for the cost of production resources; 2) price support; 3) losses of banks related to issuing preferential loans to rural producers; 4) stimulating the volume of output and the efficiency of related types of economic activity by increasing the amount of resources produced by the agriculture. Based on the presented developments, the most rational level of production costs was determined, when each additional ruble (as well as according to types) invested in the production allows to get the maximum increase in performance indicators. In addition, a positive effect of stimulating the growth of agricultural production on the performance of manufacturing (food) industry entities has been determined. These developments can be used to justify the sources and volumes of financing the priority areas for development of agriculture in the Republic of Belarus in the mid- and long-term outlook.