THE EVALUATION OF SMALL AND MEDIUM FARMS’ ECONOMIC VIABILITY IN THE NEW EU COUNTRIES
Published: 29 Aug 2014
Abstract: The common European agriculture policy of 2014-2020 emphasises that one of the ways to encourage the sustainable development in agriculture is the increasing of small and medium farms’ economic viability. The EU names the viable production of foods that should increase the viability in agriculture sector encouraging the farms’ sustainability, progress an integration growth in rural areas. The article evaluates the alterations in farms’ economical viability of the new EU countries (EU-10) according to the methodology of J. Scott (2001). It was determined that, based on the limits of viability by J. Scott (2001), the farms are viable. One specific indicator was distinguished (the production subsidies and gross profit ratio), that shows how the farms remain viable only with the help of direct payments. The latter appears to exceed the set limit of viability by 5 times in Lithuania and twice in the EU-10 countries. The tendencies of alterations in the farms economic viability in 2014-2020 are directed to the model of direct payments and the economic viability of the small and medium farms. It is supposed to increase the viability of the agricultural sector by guaranteeing the normal living rate of the farmers, by encouraging the sustainability, development and the integration growth in the rural areas.
Keywords: economic viability, farmers’ farms, the eu agricultural policy, direct payments, the eu countries, financial indicators
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