Provision of Public Goods in Czech Agriculture

Agriculture plays an important role in the provision of a wide range of public goods, such as farmland biodiversity, water quality and availability, soil functionality, air quality, climate stability, resilience to flooding, agricultural landscape, social, economic and cultural viability of rural society, farm animal welfare and food security. This provision of public goods is generally accepted as a justification for public intervention in a market economy. Ever since the reform in 1985, Common Agricultural Policy has been targeted to enhance the provision of public goods. A recent CAP reform introduced the Green Direct Payment - a new policy instrument in Pillar 1 - which remunerates farmers for the provision of environmental public goods. However, there are also instruments in Pillar II that support the provision of environmental goods, including social public goods. The paper addresses these issues and focuses on public goods provided by Czech agriculture. The research question is focused on the possibility of economically valuating all these goods together using one valuation method. The research questions will be answered by designating public goods in agriculture and specifying the most used method of their valuation. A precise literature survey will be conducted, previous studies and scientific publications will be compared, and the results of ecological, biological and economic research will be linked. The final state of art will be used as a basis for calculating a level of subsidy that covers the production of agricultural public goods.