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Sustainability 2018, 10(7), 2465; https://doi.org/10.3390/su10072465

Exploring the Road to Agricultural Sustainability by Assessing the EU Debt Influencing Factors

1
The Department of Finance, The Bucharest University of Economic Studies, 5-7 Mihail Moxa Street, District 1, 010961 Bucharest, Romania
2
The Department of Agrifood and Environmental Economics, The Bucharest University of Economic Studies, 5-7 Mihail Moxa Street, District 1, 010961 Bucharest, Romania
3
The Economics II Doctoral School, The Bucharest University of Economic Studies, Tache Ionescu Street, No.11, District 1, 010961 Bucharest, Romania
*
Author to whom correspondence should be addressed.
Received: 20 May 2018 / Revised: 9 July 2018 / Accepted: 11 July 2018 / Published: 13 July 2018
(This article belongs to the Section Economic, Business and Management Aspects of Sustainability)
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Abstract

The importance of agricultural financing in ensuring food security and safety, jobs, poverty reduction, economic growth and more recently, climate change mitigation, natural resource conservation and sustainable development imposes periodic analysis of the factors which might influence the farmers’ financial situation, in order to improve it. One way of assessing this is to analyze the agricultural debt. In this context, based on previous models, the paper aims to assess the impact of specific factors on the agricultural debt level in the European Union during 2008–2015, as these should be considered in future common agriculture policies as well as in achieving sustainable agriculture. The research was conducted based on econometric techniques, by applying panel models in the Eviews 7.0 software-64 bit version. More than 20 variables were considered in the analysis. Some of the findings suggest that an increase in subsidies as well as the share of cash flow in the total existing capital would determine considerable reductions of the total debt. Decoupled subsidies seem to have a higher impact than coupled subsidies on short term debt, while its value is between the one found for coupled subsidies in the case of long term debt. Large farms/companies, to which decoupled payments are granted, have higher debts on long run and on total debt. The same units, to which coupled subsidies were granted, have smaller short-term debt. In contrast, the increases of labor costs, fixed costs, and crop/livestock costs lead to an increase in the total debt, since the farms require additional financial resources to cover the expanded costs. Also, the results suggest that short-term debts are mainly formed of long-term loans that reached maturity. In this case, the authors support the idea of differentiated financing programs for the agricultural activities because of their peculiarities and reinforced by the need to turn the intensive agriculture into a sustainable and plentiful one. View Full-Text
Keywords: agricultural debt; cost; crops; livestock; payments; subsidies agricultural debt; cost; crops; livestock; payments; subsidies
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited (CC BY 4.0).
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Brad, L.; Popescu, G.; Zaharia, A.; Diaconeasa, M.C.; Mihai, D. Exploring the Road to Agricultural Sustainability by Assessing the EU Debt Influencing Factors. Sustainability 2018, 10, 2465.

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