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Evaluating the Financial Position and Performance of a typical Dairy Farm in Bulgaria

Author

Listed:
  • Vassilev, Zlatan

Abstract

The aim of this paper is to explore the potentials of typical middle sized dairy farms (with 22 cows) to absorb the quotas and market shares released by the small scale farms after the EU accession in 2007. The hypothesis is that quota introduction combined with high quality standards for raw milk will significantly reduce the share of small scale farms in milk production for processing. If different opportunities for alternative income-generating activities become available for small farms (as a consequence of the EU accession), their willingness to give up dairy farming will increase. Middle sized farms will benefit from an improved access to resources and also from more favourable conditions for economic growth. In this paper the analysis was made on the International Farm Comparison Network (IFCN) concept of typical farm. The Trade Implication and Policy Implication CALculator (TIPICAL) modelling program provides financial statements and most of the calculations for business’ profitability, solvency, liquidity, cost analysis and comparisons. The results of the financial analysis show the poor credit power of farms, when calculated only on farm assets market price. In the same time, it reveals the potential of growing and carries out an economy of scale when both financial and farm management are improved.

Suggested Citation

  • Vassilev, Zlatan, 2007. "Evaluating the Financial Position and Performance of a typical Dairy Farm in Bulgaria," MPRA Paper 13982, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:13982
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    File URL: https://mpra.ub.uni-muenchen.de/13982/1/MPRA_paper_13982.pdf
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    References listed on IDEAS

    as
    1. Philip Kostov & John Lingard, 2004. "Modelling the effects of subsistence on Bulgarian agricultural performance," Computational Economics 0409002, EconWPA.
    2. Plamen Mishev & Philip Kostov, 2004. "Decision making pattern of subsistence farmers in Bulgaria," Others 0409012, EconWPA.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    dairy farm structure; financial position; measures of solvency; growth potential;

    JEL classification:

    • N54 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - Europe: 1913-
    • E27 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Forecasting and Simulation: Models and Applications
    • Q0 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q14 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Finance
    • P32 - Economic Systems - - Socialist Institutions and Their Transitions - - - Collectives; Communes; Agricultural Institutions
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy

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