Damyan Kirechev
University of Economics โ Varna 9002, Blvd. โKnyaz Boris Iโ 77, Bulgaria
DOI: https://doi.org/10.31410/EMAN.S.P.2019.201
3rd International Scientific Conference – EMAN 2019 – Economics and Management: How to Cope With Disrupted Times, Ljubljana – Slovenia, March 28, 2019, SELECTED PAPERS published by: Association of Economists and Managers of the Balkans, Belgrade, Serbia; Faculty of Management Koper, Slovenia; Doba Business School – Maribor, Slovenia; Integrated Business Faculty – Skopje, Macedonia; Faculty of Management – Zajecar, Serbia, ISBN 978-86-80194-19-6, ISSN 2683-4510
Abstract:
The aim of the article is to analyze the role of bank lending for the development of the agrarian sector and to assess the impact of subsidies on bank lending, on the example of Bulgaria. The survey period is 2007-2018 – after the country joined the European Union. The correlation between the bank credit and the production generated in the sector is analyzed. Data from the Bulgarian National Bank and the Ministry of Agriculture and Food of Bulgaria were used. There is a correlation between the bank credit for agriculture and the production produced in the sector. The importance of credit for agrarian development is increasing. Improvements in credit conditions for agricultural holdings are observed. Bank loans are analyzed by type and term. The relationship between bank lending and agricultural subsidies for various scale producers has been studied. Small farms are more likely to use subsidies to secure short-term loans, and large farms prefer long-term loans. Subsidies typically have a push-out effect on short-term loans for large farms and on long-term loans for small farms. There is a positive causal effect of subsidies on bank loans for the agrarian sector. Recommendations are proposed to improve access to credit for farmers as a prerequisite for sector growth.
Keywords:
Financing of agriculture, crediting, agricultural credits, access to credit, subsidizing agriculture.
REFERENCES
[1] Ayeomoni, I., Aladejana, S. (2016) Agricultural Credit and Economic Growth Nexus. Evidence from Nigeria. International Journal of Academic Research in Accounting, Finance and Management Sciences, Vol. 6, No.2, April 2016, pp. 146โ158
[2] Barry, P.J. and L.J. Robinson (2001), โAgricultural Finance: Credit, Credit Constraints and Consequencesโ, in B. Gardner and G. Rausser (eds), Handbook of Agricultural Economics, Vol. 1A, Amsterdam: Elsevier, pp. 513โ571.
[3] Bezemer, D.J. (2002), โCredit markets for agriculture in the Czech Republicโ, Europe-Asia Studies, 54(8): 1301โ1317.
[4] Ciaian, P. Pokrivcak J. Szegenyova, K. (2011) Do agricultural subsidies crowd out or stimulate rural credit institutions? The Case of CAP Payments. Factor Markets, working paper, September 2011, p. 25
[5] Cianian, P. Falkowski, J. Kancs, dโA., Pokrivcak, J. (2011) Productivity and Credit Constrains. Farm-level Evidence from Propensity Score Matching, Factor Markets, working paper, โ 3, September 2011, p. 29
[6] Davidova, S. and K. Thomson (2003), Romanian Agriculture and Transition toward the EU, Lanham, MD, Boulder, CO, New York, NY and Oxford: Lexington Books.
[7] Jansson, J. Huisman, C. Lagerkvist, C. Rabinowicz, E. (2013) Agricultural Credit Market Institutions. A Comparison of Selected European Countries. Factor Markets, working paper, โ33, January 2013, p. 30
[8] Kirechev, D. (2010) Kreditnoto finansirane na agrarniya sector โ aspekti na ikonomicheska kriza. Conference proceeding book โSvetovnata kriza I ikonomicheskoto razvitie, Nauka i Ikonomika, Varna, vol. 3, pp. 83-92 (bg).
[9] Latruffe, L., S. Davidova, E. Douarin and M. Gorton (2010), โFarm expansion in Lithuania after accession to the EU: The role of CAP payments in alleviating potential credit constraintsโ, Europe-Asia Studies, 62(2): 351โ365.
[10] Lyubenov, L. Lyubenova, A. (2017) Bulgarian Financial Agricultural Markets. Economic Studies, Economic research institute at BAS vol. XXVII, Number 2, p. 113-131 (bg)
[11] Myyra, S. (2013) Agricultural Credit in the EU. Land, Labor and Capital Markets in European Agriculture. Diversity under Common Policy, Chapter 22, Edited by J. Swinnen and L. Knops. Centre for European Policy Studies (CEPS), Brussels, p. 260-271
[12] Njogu, G. K., Olweny, T. & Njeru, A. (2018). Relationship between farm production capacity and agricultural credit access from commercial banks. International Academic Journal of Economics and Finance, 3(1), 159-174
[13] Rhaji, M. A. (2008). An Analysis of the Determinants of Agricultural Credit Approval/ Loan size by Commercial banks in South-Western Nigeria. Nigeria Agricultural Development Studies, 1(1), 17-26.
[14] Shepherd, W. G. (2002). Market Power and Economic Welfare. New York: Randan House.
