Quantification of the Effect of Subsidies on the Production Performance of the Slovak Agriculture

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Abstract Almost every country was heading a large portion of their income on agricultural subsidies. The agricultural subsidies are an essential aspect of agriculture and play an important role in international trade. A policy to support farming incomes in the European Union is called the Common Agricultural Policy. It is the complicated policy that includes many tools. An impact of policy of EU agricultural support on the economic performance of agricultural enterprises is therefore an interesting question, especially for policy makers. The agriculture in Slovakia has undergone significant changes, not only in terms of its position in the national economy, but also in terms of its importance at the regional level. There are still persistent differences between better and worse natural conditions as well as economic and social differences with a possible impact on the level of gross agricultural production in different regions of Slovakia. The aim of this paper is to quantify the dependence of agricultural production from the subsidies granted in the context of regions under the NUTS III classification. For the calculation, we used Pearson correlation coefficient that determines the direction and rate of statistical dependence force of two numeric variables. The analysis confirmed our assumption, the result of which is that between amount of gross agricultural production and the volume of subsidies granted is a strong correlation.