Subsidizing fiscal policy in support of the agricultural sector- The case of Kosovo

The paper analyzes the impact of subsidies, in the form of direct payments in the agricultural sector in Kosovo. The analysis is made more complete by data on production, exports and imports, which are taken as a basis from 2014-2018.Given the fact that Kosovo has high potential in agricultural development, it is very important to analyze this sector and this is done through the OLS regression model with the Stata program.The paper uses data from secondary sources such as the Kosovo Agency of Statistics, Ministry of Agriculture, Forestry and Rural Development as well as other local and international sources which provide data on agricultural subsidies based on production, exports and imports.Based on the findings of the paper, it is shown that production is a very important factor in which subsidies have an impact. So, of all the other factors taken for analysis, subsidies have the greatest impact on output growth. Agricultural subsidies are a very important tool in increasing production as they indirectly affect the reduction of imports of agricultural products. In line with the findings of the paper, the paper suggests that subsidies should serve as a mechanism in increasing production and reducing imports.