Acta Univ. Agric. Silvic. Mendelianae Brun. 2013, 61(4), 1137-1144 | DOI: 10.11118/actaun201361041137

The influence of subsidies on the economic performance of Czech farms in the regions

Miroslav Svatoš, Markéta Chovancová

Department of Economics, Faculty of Economics and Management, Czech University of Life Sciences in Prague, Kamýcká 129, 165 21 Prague 6 - Suchdol, Czech Republic

The main goal is analysis of the influence of subsidies on the economic performance of farms in individual regions since the Czech Republic joined the EU. The basis for verification of the hypotheses was data from the Farm Accountancy Data Network of the Czech Republic (FADN CR) broken down by regions. The economic performance of farms is determined here on the basis of six selected proportional indicators of financial analysis and their statistical processing using the WSA and TOPSIS methods. By both the WSA and the TOPSIS methods, in 2004-2010 the farms in the Karlovy Vary Region and in the last monitored year (2011) the farms in the Southern Moravia Region were identically evaluated as having the best economic performance. In 2004 the WSA method identified the farms with the worst economic performance as being in Vysočina, while the TOPSIS method rated the Ústí nad Labem Region as having the farms with the worst performance. In 2005-2006, both methods identically put the Pilsen Region in last place for economic performance of farms, while in 2007 the farms in Liberec Region and again in 2008 the farms in Pilsen Region were in last place. In 2009 the WSA and TOPSIS methods identically identified the farms with the worst economic performance as being in the South Bohemia Region. During 2010-2011 the two methods agreed that the farms with the worst economic performance were in Pilsen Region. Economic performance of farms in the regions Ústí nad Labem, Pardubice, Vysočina, Central Bohemia, Hradec Králové, South Moravia, Ostrava, and Olomouc, and also vertical economic performance of farms is dependent on the amount of subsidies received. On the other hand, for economic performance of farms in the Liberec, Pilsen, and Karlovy Vary regions, this dependence must be refuted. The assumption that the Common Agricultural Policy contributes towards the reducing of economic disparities between farms in the individual regions of the Czech Republic, has been confirmed only by the TOPSIS method in absolute expression. Nonetheless, by the WSA method in absolute and relative expression and by the TOPSIS method in relative expression, it must be refuted.

Keywords: Common Agricultural Policy, subsidies, Czech farms, economic performance, regions, WSA and TOPSIS methods

Grants and funding:

Research presented in this paper is the result of a research grant MSM 6046070906 "Economics of Czech agricultural resources and their efficient usage within the framework of multifunctional agri-food systems."

Received: May 2, 2013; Published: July 13, 2013  Show citation