The Roles of Commercial Credit and Direct Subsidies in Czech Agriculture During Early Transition

This paper provides an econometric estimation of the influence of individual social-economic, natural, and technological determinants of the credit provision for the agriculture in the case of the Czech Republic. The regression model is based on the microeconomic model of the maximization of the bank’s profit. The results of this paper show that the support of agricultural credit provided by Guarantee Fund goes primarily to the areas with a good conditions for the development of agricultural production. On the other hand, the direct government subsidies are targeted primarily to the areas with non-favourable natural conditions.