Vlada Vitunskienė

Subjective approach to social effects of direct aid to the agricultural producers

The paper presents the results of “The Impact of Agricultural Policy on Income Levels and Income Differentiation among Rural Inhabitants” project based on the subjective approach to the evaluation of social effects of direct aid. The aim of the research is to uncover the beneficiaries’ perceptions of direct aid to producers as a means of social redistribution as well as its social effects. The research is based on primary data that were obtained from a quantitative survey of the recipients of agricultural direct aid. The literature on the effects of direct aid or other agricultural policy subsidies on farm profitability, productivity, results of operation, and decision making is scarce. There are only a few of studies by Western authors evaluating the agricultural policy effects on the income distribution in the agricultural community. It is important to determine this redistributional agricultural policy effect in Lithuania because of a number of significant reasons. Firstly, receiving direct payments deprives the small farm households of social benefit support provided by the Fi-nancial aid to disadvantaged families and living alone persons law of Republic of Lithuania. Secondly, agricultural direct aid is unequally distributed among beneficiaries and that increases the income inequality in the agricultural community. The results of the study on the farming com-munity’s perception of the aforementioned social effects are very important in agricultural and social policy making. JEL codes: D190, D330, Q180.