THE DEVELOPMENT, STRUCTURE AND CHANGES IN DIRECT SUPPORT AFTER EU ACCESSION IN THE CZECH REPUBLIC AND POLAND

Public support is inseparably connected to the Europe Union Common Agriculture Policy. Over the years it developed and transformed toward environmentally oriented policy. In relation to Brexit and new EU challenges (security, border protection), CAP support is discussed to be reduced. According to the most recent proposals, the largest farmers shall be capped at a certain support level. The main aim of the contribution is to define, how has changed the importance of public support (direct payments) within agriculture and how direct support effects gross value added generation in the Czech Republic and Poland. Macro data (Eurostat), as well as microdata (EU FADN), are used for the period 2004-2016. Results indicate that in both countries public support is curtailed for the whole sector, as it contributed to gross value added formation by 40-50% in Poland and by 50-60% in the case of the Czech Republic. If proposed Common Agricultural policy (e.g. CAP) changes of the CAP are implemented, loss in direct support income shall result in farmers' strategies reconsideration. The loss of income at the level of larger farms, if seen as an opportunity, may results into higher value-added production strategies, leading to higher profitability with positive effects on the public budget through tax collections in the long-term perspective.