SLOVAKIA: ESTIMATES OF SUPPORT TO AGRICULTURE

Contact person: Václav Vojtech

Email: vaclav.vojtech@oecd.org

Tel :

(33-1) 45 24 92 66

Fax :

(33-1) 44 30 61 02

DEFINITIONS AND SOURCES

Note: The series of estimates of support to agriculture for Slovak Republic are ending in 2003, as from 2004 the estimates of support to Slovak agriculture are part of the EU estimates.

Country Total Support Estimate (TSE) and derived indicators in Table 1 cover all agricultural production, i.e. all agricultural commodities produced in the country. Definitions of basic data sets refer to the specific name of the programmes with specific sources indicated in square brackets. For the Producer Support Estimates (PSE) and Consumer Support Estimates (CSE), the description of policy measures indicates the commodities covered by the measures, as well as the method of allocation of the corresponding transfers among commodities. "MPS commodities", which vary across countries, are those for which market price support is explicitly calculated in Table 2.

Market Price Support (MPS) and Consumer Support Estimates (CSE) by commodity in Table 2 are calculated for the following commodities: wheat, maize, barley, rye, oats, rapeseed, sunflower, sugar, milk, beef and veal, pig meat, poultry meat, and eggs. Definitions are provided only for basic data sets from which all the other data sets in this table are derived, following the formula indicated in each commodity table. Specific sources are indicated in square brackets.

Producer Support Estimates (PSE) by commodity in Table 3 are calculated only for commodities produced in the country within a common set of commodities (wheat, maize, barley, oats, rice, sorghum, soybeans, sunflower, rapeseed, sugar, milk, beef and veal, pig meat, poultry meat, sheep meat, wool, and eggs); provided that the value of production of that commodity exceeds 1% of the total value of production in the country concerned. All data sets in the calculation of PSE by commodity come from Tables 1 and 2 where definitions are included.

Definitions of the indicators, criteria of classification of programmes included, and methods of calculation can be seen in OECD, Methodology for the measurement of support and use in policy evaluation [http://www.oecd.org/agr/policy].

Table 1. SLOVAKIA: Total support estimate

Definitions:

I. Total value of production (at farm gate): Total agricultural production valued at farm gate prices, i.e. value (at farm gate) of all agricultural commodities produced in the country [1].

1. Of which share of MPS commodities (%): Share of commodities for which MPS is explicitly calculated (in Table 2) in the total value of agricultural production.

II. Total value of consumption (at farm gate): Consumption of all commodities domestically produced valued at farm gate prices, and estimated by increasing the value of consumption (at farm gate) of the MPS commodities according to their share in the total value of agricultural production [(II.1) / (I.1) x100].

1. Of which MPS commodities: Sum of the value of consumption (at farm gate prices) of the MPS commodities as indicated in Table 2.

III.1 Producer Support Estimate (PSE): Associated with total agricultural production, i.e. for all commodities domestically produced [Sum of A to H; when negative, the amounts represent an implicit or explicit tax on producers].

A. Market Price Support: On quantities domestically produced (excluding for on-farm feed use -- excess feed cost) of all agricultural commodities, estimated by increasing the MPS for the MPS commodities according to their share in the total value of agricultural production [(A.1) / (I.1) x 100].

1. Of which MPS commodities: Sum of the MPS (net of price levies and excess feed cost) for the MPS commodities as calculated in Table 2.

B. Payments based on output

1. Based on unlimited output

Differential payments for disadvantaged areas (1986-1991): Payment to farms in less favoured areas (LFAs) provide in a form of specific rate of the value of sold production; net of the tax per hectare of land cultivated in favoured areas. In 1991, the amount of collected tax was distributed to LFAs in a per hectare basis, in 1992 the tax was collected but not distributed to the LFAs, and the system was disconnected since then. The payments for crops are allocated to all crop commodities according to the share in the total value of crop production; the payments for livestock are allocated to all livestock commodities according to the share in the total value of livestock production.

Supplementary price payments (1986 - 1990): Payments per tonne of marketed output of specific commodities to encourage production, in light of the plan [1]. Due to a lack of information on the amounts of the annual payments to specific commodities, the total amount of these payments are allocated to all commodities according to their share in the total value of production.

Supplementary price payments to tobacco (from 1997): Payments per tonne of tobacco production sold to processors.

2. Based on limited output

Milk quality payments (from 1993): Payment per litre of extra-quality milk sold to dairies, within the production quota.
Pigmeat quality payments (from 1999 to 2001): Payments per kg for high quality pigs for slaughtering sold on the market. Not applied in 2002.
Beef quality payments (from 2000): Payments per kg for high quality bulls for slaughtering sold on the market.

Payments for late potatoes and sugarbeet (from 2001): Payment per tonne of late potatoes and sugarbeet (the payment is limited to a fixed production per hectare).

C. Payments based on area planted/animal numbers

1. Based on unlimited area or animal numbers

Support to sheep and goat production (1993-1995): Payment per head sheep and goat in less favoured areas [1].

Support to cattle and sheep production (from 1996): Payment per head of beef (including dairy cows) and sheep in less favoured areas (84% for beef and 16% for sheep) [1]. Allocated to beef and milk according to their share in the value of beef and milk production.

Stabilisation payments (1991): Payments per hectare to support the production of sugar beet (0.45), potatoes (0.45), vegetables on arable land, fruits and grapes (0.10). [1]

Support to bee keeping (from 1998): Payment per colony of bees [1].

Area payments in less favoured conditions (from 1991): Payment per hectare to all agricultural land, based on the former differential payment system. The rate of payment is fixed (inversely proportional) according to the historical land use value. [1]. Allocated to all commodities according to the share in the total value of production.

Support to conversion of arable land to grassland (from 1999):

Area payments for arable and permanent crop (from 2000): Payments per hectare of arable and permanent crops in less favoured areas. To obtain these payments at least a normative level of the value of production per hectare is to be reached.

 

2. Based on limited area or animal numbers

Disaster payments for crops (1999. 2000, 2001): Payments compensations for losses due to severe floods and droughts. Allocated to all crops according to the share in the total value of crop production.

Disaster payments for livestock (1999, 2000): Payments compensations for losses due to severe floods and droughts. Allocated to all livestock according to the share in the total value of livestock production.

D. Payments based on historical entitlements

1. Based on historical plantings/animal numbers or production

2. Based on historical support programmes

E. Payments based on input use

1. Based on use of variable inputs

Interest concessions: Calculated as the difference between the average commercial interest rate and the interest rate paid by farmers, multiplied by the volume of outstanding loans for purchasing variable inputs, including:

Soft loans supporting creation of private market oriented farms extended in the period from 1991 to 1993 to newly created and restructured farms [1].

State Guarantee Fund for Farming and Forestry (SGFFF) interest subsidies on commercial bank loans provided under several programmes of the SGFFF [2]. Allocated to all commodities according to their share in the total value of production.

On variable inputs granted by the State Land Fund (from 1996): Interest rate subsidies extended to farmers who privatised the former state farm assets in less favoured areas [3]. Allocated to all commodities according to their share in the total value of production.

Non-repaid interests write-offs on the old block of investments (by the Ministry of Finance) (from 1994), Outstanding debts to repayable loans extended from the state budget before 1991 [4], are allocated to all commodities accounting to their share in the total value of production.

Calculated on a fiscal year basis and allocated to all commodities according to the share in the total value of production.

Fertiliser, lime and chemical payments (1986 - 1990): Budgetary expenditures to finance lower prices of inputs supplied through the state-owned Agricultural Supply and Procurement Agency (ZZN), which had a monopoly on supplying inputs to producers [1]. Allocated to all commodities according to their share in the total value of production.

Direct payments to compensate part of input costs (from 1993): Budgetary expenditure compensating part of the cost for inputs such as plant and seeds, selected fertilisers. Allocated to all commodities according to their share in the total value of production.

Water subsidies (from 1994): Budgetary expenditures to finance part of the expenditure for irrigation water [1]. Allocated to all crops according to their share in the total value of crop production.

Fuel subsidies (from 1996): Fuel tax concessions granted to farms [1]. Allocated to all crops according to their share in the total value of crop production.

Feed subsidies:

Compound feed subsidy (1986-1989): Budgetary expenditure to finance lower prices of compound feed supplied to farms through the state-owned Agricultural Supply and Procurement Agency (PZN], which had a monopoly on supplying inputs to producers [1]. Allocated to livestock products according to their share in the total value of livestock production.

2. Based on use of on-farm services

3. Based on use of fixed inputs

Capital grants:

Payments to farms through the Intensification Fund (1986 - 1990) covering part of investments for machinery and buildings [1]. Allocated to all commodities according to their share in the total value of production.

Payments covering part of farm investments in developing private market-oriented enterprises in agriculture and restructuring and privatisation of enterprises in the farming sector (1991-1992) [1]. Allocated to all commodities according to their share in the total value of production.

Direct payments to compensate part of investment costs (from 1993): Budgetary expenditure compensating part of the expenditure to agricultural investments (buildings, equipment, agricultural machinery, livestock). Allocated to all commodities according to their share in the total value of production.

Investment to agriculture financed by SAPPARD (activity 1)(from 2003): Payments provided to finance part of investment on farms in the projects agreed under the SAPARD programme. Calculated on a fiscal year basis and allocated to all commodities according to the share in the total value of production [1].

Interest concessions

Calculated as the difference between the average commercial interest rate and the interest rate paid by farmers, multiplied by the volume of outstanding loans for investment, including:

    • soft loans supporting creation of private market oriented farms extended in the period from 1991 to 1993 to newly created and restructured farms [1].
    • commercial bank loans provided under several programmes of the State Guarantee Fund for Farming and Forestry SGFFF [2].

Calculated on a fiscal year base and allocated to all commodities according to the share in the total value of production.

F. Payments based on input constraints

1. Based on constraints on variable inputs

Payments to organic (alternative, biological) farming (1991-1993 and from 1996): Payments per hectare of agricultural land where farmers operate without chemicals and fertilisers on voluntary basis (not imposed by environmental regulation) [1]. The payments are allocated to all crop commodities according to the share in the total value of crop production.

2. Based on constraints on fixed inputs

3. Based on constraints on a set of inputs

G. Payments based on overall farming income

1. Based on farm income level

Tax concessions: On profit tax to large scale farms (1986-1992). Allocated to all commodities according to the share in the total value of production.

Income tax concession (from 1997): Income tax concessions granted to individual farms. Allocated to all commodities according to the share in the total value of production.

Road tax concession (from 1997): Allocated to all commodities according to the share in the total value of production.

2. Based on established minimum income

H. Miscellaneous payments

1. National payments

2. Sub-national payments

III.2 Percentage PSE [(III.1) / ((I) + (Sum of B to H)) x 100]

III.3 Producer NPC: For all agricultural commodities the Producer NPC is estimated as a weighted average of the producer NPC calculated for the individual MPS commodities and shown in Table 2. For each commodity Producer NPC = [domestic price received by producers (at the farm gate) + unit payments based on output] / border price (also at the farm gate).

III.4 Producer NAC [1 / (100 - (III.2)) x 100]

IV. General Services Support Estimate (GSSE): Total budgetary expenditure to support general services provided to agriculture [Sum of I to O]

I. Research and development

Budget expenditure provided through the Ministry of Agriculture (MoA) to several research institutions, and the activities of the Genetic Fund ( including for the developments and maintenance of plants, animal genetic fund), plant medical service [1].

J. Agricultural schools

Budget expenditures to finance school farms (1986 - 1991) and agricultural vocational schools.

Budget expenditures to finance training and education to farmers. [1]

K. Inspection services

Budget expenditures on inspection of agricultural and food production by Slovak Agricultural and Food Inspection Authority (SPPI), State Veterinary Service, the Central Agricultural Institute for Control and Testing [1].

L. Infrastructure

Budget expenditure on the operation and maintenance of public drainage and irrigation equipment financed by the Land Improvement Fund [1].

Budget expenditure financing Land Offices activities in setting and updating agricultural land registration (database) in rural cadastres [1].

Budget expenditures financing the renewal of rural infrastructure in flooded areas [1].

Budget expenditures (1999, 2000) financing the building of institutions to implement the SAPARD programme.

M. Marketing and promotion

Budget expenditure to finance marketing, mainly price monitoring systems implementation programme; and to contribute to finance the participation on international fairs and exhibitions and other forms of promotions [1].

N. Public stockholding

O. Miscellaneous

V.1 Consumer Support Estimate (CSE): Associated with agricultural production, i.e. for the quantities of commodities domestically produced, excluding the quantities used on-farm as feed -- excess feed cost. [Sum of P to S; when negative, the amounts represent an implicit tax on consumers].

P. Transfers to producers from consumers: Associated with market price support on all domestically produced commodities, estimated by increasing the transfers calculated for the MPS commodities according to their share in the total value of production [(P.1) / (I.1) x 100].

1. Of which MPS commodities: Sum of the values of transfers from consumers to producers associated with market price support for the MPS commodities as calculated in Table 2.

Q. Other transfers from consumers: Transfers to the budget associated with market price support on the quantities imported of domestically produced commodities, estimated by increasing the transfers calculated for the MPS commodities according to their share in the total value of production [(Q.1) / (I.1) x 100].

1. Of which MPS commodities: Sum of the transfers to the budget associated with market price support on the quantities imported of the MPS commodities as calculated in Table 2.

R. Transfers to consumers from taxpayers: Consumer subsidies provided in the form of a "Negative turnover tax" applied on basic food products under the command economy (1986 to mid-1990) and allocated to commodities for which there were directly paid.

S. Excess Feed Cost: Associated with market price support on quantities domestically produced and used on-farm as feed as calculated in Table 2.

V.2 Percentage CSE [(V.1) / ((II) - (R)) x 100]

V.3 Consumer NPC: For all agricultural commodities the Consumer NPC is estimated as a weighted average of the consumer NPC calculated for the individual MPS commodities and shown in Table 2. For each commodity Consumer NPC = domestic price paid by consumers (at the farm gate)/ border price (also at the farm gate).

V.4 Consumer NAC [(1 / (100 -(V.2)) x 100]

VI. Total Support Estimate [ (III.1) + (IV) + (R)] and [ (T) + (U) - (V)]

T. Transfers from consumers [ (P)+(Q)]

U. Transfers from taxpayers [ (III.1)-(P)+(IV)+(R)]

V. Budget revenues [ (Q)]

Sources:

[1] Ministry of Agriculture

[2] Research Institute for Agriculture and Food Economics (VUEPP)

Table 3. Producer Support Estimate by commodity

Definitions and Sources: see Tables 1 and 2 above.