CAP support as a source of capital and labour productivity – analytical considerations

Abstract

The level of internal generation of financial funds, i.e. savings, is limited by the achieved productivity and profitability of production. As aside not, it appears easier to overcome the income problem as the basis for that generation of savings by means of interventionism and the underlying transfer of funds from other fields of operation through the national and EU budget to the agricultural holdings. This is a supplementation of the internally generated funds. In the paper, the authors will signal the basic relations between the savings (and external subsidies), investments and increase in production capital of an agricultural producer and an increase of its labour productivity as a basis of growth of income. The goal is to demonstrate the following relations in this respect that form an intrinsic circuitous movement with mutual interdependencies. For the proof of legitimacy, an analytical model with empirical illustrations will be used.

Keywords: agricultural producers, income, efficiency, transfers, subsidies and support for agriculture