Effects of Public Support on Producer Groups Establishment in the Czech Republic and Slovakia

Abstract

Ten countries that have joined the European Union in 2004, had a chance to use EU rural development instruments for support of establishment new producer groups of agricultural producers between 2004 and 2006. Both analysed countries (Czech Republic and Slovakia) have used the opportunity and co-financed programme that aimed on supporting establishment and alleviation of administrative burden. Main aim of the article is to compare conditions and outcomes of the programmes in the Czech Republic and Slovakia and to propose programme innovations. The article describes theoretical assumptions, compares legislative background in selected countries, measures amount of support available and compares outcomes of newly established groups after receiving last supporting payment. One of the conclusions finds Slovak approach more effective. Lower number of supported groups and different conditions result in higher share of successful organisations, higher average revenues of supported groups and higher proportion of revenues in relation to total output of agricultural industry. Finally there are proposed recommendations for the Czech Republic, how programme conditions should be innovated. The article originated as a part of the Internal Grant Agency (IGA) of the Czech University of Life Sciences Prague, Registration Number 20121077.