COST-BENEFIT ANALYSIS FOR MAKING DECISIONS ON INCENTIVES FOR INVESTMENTS IN PLUM TREES PLANTING

In this paper we consider the application of Cost/Benefit Analysis procedure in the decision process on socialeconomic profitability of subsidy implementation for investments in agricultural production, based on newly planted plum trees. Cost/Benefit Analysis has many advantages over the other common methods. It proved to be especially useful in the agricultural production, because it is possible to estimate the profitability of investments in the special conditions of agricultural production, taking into account many factors of its economic efficiency, as well as main effects that individual producers and the whole social community can expect. The application of Cost/Benefit Analysis, based on the data gathered for Bosnia and Herzegovina, enabled insight into the profitability of the existing subsidy programs for investments in plum trees planting, that take place in the conditon of the whole economy transition and high degree of rural population unemployment.