Publication detail

The Quantitative and Qualitative Analysis of the Budget Cost of the Czech Supporting and Guarantee Agricultural and Forestry Fund

Author(s): prof. Ing. Karel Janda M.A., Dr., Ph.D.,
Type: Articles in refereed journals
Year: 2005
Published in: WP IES no. 86
Publishing place:
Keywords: Transition, Credit, Subsidies, Guarantees.
JEL codes: D82, G28, P31.
Suggested Citation:
Grants: IES Research Framework Institutional task (2005-2011) Integration of the Czech economy into European union and its development
Abstract: The paper analyzes the government budget cost of credit guarantees and subsidies. The analysis
is done both in a general qualitative manner and quantitatively for the case of Czech Supporting
and Guarantee Agricultural and Forestry Fund(SGAFF). In the quantitative part of the paper
we show that the portfolio of the SGAFF has a sufficient value to cover expected costs of credit
guarantees and subsidies provided by the SGAFF. The qualitative theoretical model is dealing
with government interventions designed to decrease the credit rationing of good farmers.The
theoretical model shows that with uniform non-targeted supports the budget cost minimizing
government unambiguously prefers lump-sum guarantees to interest rate subsidies. With supports
targeted fully to disadvantaged farmers the government is indifferent between lump-sum
guarantees, proportional guarantees and interest rates subsidies as far as the government budget
costs are concerned.
Downloadable: The text of the paper


Česká Spořitelna


Patria Finance