Managing Agricultural Enterprises by Paweł Bryła

Author:Paweł Bryła
Language: eng
Format: epub
Publisher: Springer International Publishing, Cham

6.2 Planning and Forecasting Profitability

Chovancová (2013) states that agriculture in the Czech Republic is the principal beneficiary of EU subsidies , which is a paradox because the importance of agriculture in the Czech Republic was considered as a controversial issue of the Czech accession negotiations. In most of the fourteen regions of the Czech Republic, agriculture contributes to the gross value added by 0–5% only, with the Vysočina region with its more than 10% being an exception. Such small shares of agriculture contributions to regional gross value added are perceived as reflections of a relatively minor economic importance of agriculture in comparison with other production sectors. According to Tomšík (2010), in comparison with other states and priorities in other sectors which were taken into account during negotiations, the agricultural sector in the Czech Republic was never of a primary significance.

Baun et al. (2009) also point at the fact that the situation of Czech farmers is often worse due to administrative measures of the government, which are more strict and demanding than EU requirements. Tomšík (2010) mentions that one of the main distinctive features of the Czech agriculture is its specific farm structure, which he regards as a possible pitfall of the CAP, specific for the Czech Republic . Czech farms are characterised by their large-scale production, which face different problems than family farms in the Western European agriculture. According to Bojnec and Latruffe (2013), who carried out research in Slovenia, small-sized farms are more profitable that medium-sized farms. The medium-sized farms are too small to be economically effective, but on the other hand they are too big to be profitable. Gorton and Davidova (2004) mention that their research carried out in Central and Eastern Europe did not show that large-sized (corporate) farms are less efficient that small-sized (family) farms. On the one hand, Czech agriculture is characterised by small family farms and on the other hand, by large enterprises such as cooperatives, joint-stock companies or limited liability companies. The present structure developed during the 1990s and the membership of the Czech Republic in the European Union did not bring any essential changes to the structure. Private family farms use more than one quarter of total agricultural land . Their share has slightly increased; however, another wave of their growth is not expected. Almost three-quarters of the used agricultural area is farmed by larger cooperatives or companies.

The Czech Republic has the highest number of small-scale farms of up to 5 ha in the European Union. However, these owners farm the smallest area of the agricultural land . In 2007, the average farm in the Czech Republic had 89.3 ha of the utilised agricultural area, which was 7.1 times bigger than the EU-27 average and 4.1 times bigger than in the old EU-15 (European Commission 2012). The Czech government is against the measures within the “status check” of the agricultural policy, which besides others propose the reduction of subsidies volume for large-sized farms (those which obtain more than 300 thousand EUR from the EU support), which may have a negative impact on Czech farms due to their large median size.

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