MARKET FAILURE AND THE PROVISION OF PUBLIC GOODS IN AGRICULTURE

This article presents theoretical concepts and mechanisms of market failure and the response of the active state policy in the area of provision of public goods, on the example of instruments of the Common Agricultural Policy (CAP). Financing of CAP from the EU funds should be supported by expectations of the European society and the awareness of the importance of such activities. Therefore, the author made references to Eurobarometer surveys, on the basis of which she was able to show the opinion of EU citizens about the examined CAP instruments. In the article, the author argues that the provision of public goods in agriculture is only possible through the support of activities of farmers by public institutions, which can effectively support them in this regard, using available financial instruments. For many years, the financial support within the framework of the CAP has resulted in the provision of goods, both environmental and economic, as well as socio-cultural.