Statistical analysis of economic viability of farms operating in Czech areas facing natural constraints

Abstract

The redesign of the Common Agricultural Policy (CAP) allows for more room to address issues related to stabilising farmers’ income and developing their viability in areas facing natural constraints (ANC). Maintaining income levels, developing farm economies in rural areas, and encouraging competitive agricultural practises are the challenges facing the new CAP. ANCs in the Czech Republic are characterised by a lower level of income compared to areas outside ANCs and their generally prevailing specialisation in livestock production, which has been facing a relatively turbulent development in the last decade. The main aim of this paper is to evaluate the economic viability with regard to the level of natural disadvantage and with regard to farm specialisation. The database of Farm Accountancy Data Network (FADN) was used for assessment; the authors built the Farm Economic Viability indicator, which is based on modified Farm Net Value Added. The differences between the farm groups were tested through analysis of variance. Significantly lower viability was found in ANCs compared to farms outside ANCs. Field crops achieved significantly higher levels, both in and outside ANCs. The most threatened group of farms are grazing livestock in ANCs.