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Exploring the Role of EU Subsidies in Enhancing the Competitiveness of Slovak Farms

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  • Ivana Kravčáková Vozárová

    (Faculty of Management and Business, University of Prešov, 08001 Prešov, Slovakia)

  • Rastislav Kotulič

    (Faculty of Management and Business, University of Prešov, 08001 Prešov, Slovakia)

Abstract

The discourse surrounding the determinants of agricultural competitiveness is extensively examined at both the farm and sectoral tiers within the European Union. The competitiveness of Slovak farms is currently strongly influenced not only by internal factors such as productivity, innovation, and management, but also by external factors, especially political and economic decisions at the EU level. Financial support from the EU plays a key role in enhancing the competitiveness of Slovak farms. Therefore, we examined the impact of subsidies, i.e., financial support, on the competitive position of farms in Slovakia in a broader context. The aim was to determine how these subsidies influence cost-effectiveness, productivity, and the ability of farms to compete in the market. Based on the conducted research, we can conclude that EU subsidies have a significant impact on the competitiveness of agricultural enterprises in Slovakia. A statistically significant correlation was confirmed between farm competitiveness and receiving financial support through subsidies, which was evident in all observed years, except for 2013. Statistically significant differences in competitiveness were also confirmed between enterprises that receive subsidies and those that do not. Based on the results, it has been confirmed that subsidies support the income side of farms and improve the overall cost-to-revenue ratio, which is reflected in better cost efficiency. These subsidies contribute to increasing the competitiveness of agricultural enterprises by allowing farms to better cover their costs, which can have a positive impact on their ability to compete in the market in both the short term and long term.

Suggested Citation

  • Ivana Kravčáková Vozárová & Rastislav Kotulič, 2025. "Exploring the Role of EU Subsidies in Enhancing the Competitiveness of Slovak Farms," Agriculture, MDPI, vol. 15(7), pages 1-15, March.
    • Handle: RePEc:gam:jagris:v:15:y:2025:i:7:p:678-:d:1618015
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    References listed on IDEAS

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    1. Yanwen Tan & Jianbo Guan & Hamid Reza Karimi, 2013. "The Impact of the Subsidy Policy on Total Factor Productivity: An Empirical Analysis of China's Cotton Production," Mathematical Problems in Engineering, Hindawi, vol. 2013, pages 1-8, March.
    2. Sha, Zhouhao & Ren, Dong & Li, Chengyou & Wang, Zeru, 2024. "Agricultural subsidies on common prosperity: Evidence from the Chinese social survey," International Review of Economics & Finance, Elsevier, vol. 91(C), pages 1-18.
    3. Eliška Svobodová & Radka Redlichová & Gabriela Chmelíková & Ivana Blažková, 2022. "Are the Agricultural Subsidies Based on the Farm Size Justified? Empirical Evidence from the Czech Republic," Agriculture, MDPI, vol. 12(10), pages 1-18, September.
    4. Anna Nowak & Aneta Zakrzewska, 2024. "How Competitive Is the Agriculture in European Union Member States? An Assessment of Changes over the Past Decade," Agriculture, MDPI, vol. 14(4), pages 1-13, April.
    5. Kumbhakar, Subal C. & Li, Mingyang & Lien, Gudbrand, 2023. "Do subsidies matter in productivity and profitability changes?," Economic Modelling, Elsevier, vol. 123(C).
    6. Ivana Kravčáková Vozárová & Rastislav Kotulič, 2024. "The Impact of EU Subsidies on the Competitiveness of Slovak Farms from the Perspective of Legal Form," Agriculture, MDPI, vol. 14(8), pages 1-15, August.
    7. Herda-Kopańska, Justyna & Kulawik, Jacek, 2022. "Key Problems of Using Subsidies Coupled with Agricultural Production," Problems of Agricultural Economics / Zagadnienia Ekonomiki Rolnej 329857, Institute of Agricultural and Food Economics - National Research Institute (IAFE-NRI).
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    Cited by:

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