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Determinants of Farm Income Diversification Among the European Union Countries

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  • Skarżyńska, Aldona
  • Grochowska, Renata

Abstract

The aim of the article is to indicate the main factors influencing the diversification of farm income in the European Union countries. The analysis involved the production potential, production costs, and the impact of subsidies on income under the Common Agricultural Policy. The research covered farms keeping agricultural accounting in the EU-28 countries. The analysis used data for 2015-2017 and 2018, collected and processed under the FADN EU system. The analyses show that farms in the EU differed significantly in terms of the agricultural land area, the value of assets, technical equipment of work, and production intensity. It was estimated that the intensity was related to the production direction and land productivity. The income situation of farms was also significantly influenced by production efficiency. On average, from 2015-2017, the cost of EUR 1 production ranged between EUR 0.64 and 1.32, and in 2018 it was between EUR 0.64 and1.28. As a consequence, in many countries farm income depended solely on subsidies to operating activities. The research shows that subsidies eliminate the differences between countries at the level of income from production (without subsidies), which suggests a further need to continue to equalize the level of subsidies among the EU countries.

Suggested Citation

  • Skarżyńska, Aldona & Grochowska, Renata, 2021. "Determinants of Farm Income Diversification Among the European Union Countries," Problems of Agricultural Economics / Zagadnienia Ekonomiki Rolnej 319700, Institute of Agricultural and Food Economics - National Research Institute (IAFE-NRI).
  • Handle: RePEc:ags:iafepa:319700
    DOI: 10.22004/ag.econ.319700
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    References listed on IDEAS

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    1. S. Severini & A. Tantari, 2015. "Which factors affect the distribution of direct payments among farmers in the EU Member States?," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 42(1), pages 25-48, February.
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    Cited by:

    1. Bożena Kusz & Dariusz Kusz & Iwona Bąk & Maciej Oesterreich & Ludwik Wicki & Grzegorz Zimon, 2022. "Selected Economic Determinants of Labor Profitability in Family Farms in Poland in Relation to Economic Size," Sustainability, MDPI, vol. 14(21), pages 1-25, October.

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    Agricultural Finance;

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