Value-Added, Net Income and Employment in Farms in Slovakia

The paper analyses the changes in productivity of farms in Slovakia over the period 2009-2015. Due to the structure of farms and dominance of large agricultural holdings in Slovakia, the production is based on commodities with low value added. Large farms often substitute labor with capital. Employment in Slovak agriculture has decreased significantly since 2004. We use the FADN methodology for Farm Income, employment and value added to compare the situation in EU member states with Slovakia. Out of V4 countries is the decrease in employment the highest in Slovakia, followed by Czech Republic, Poland and the smallest decrease in employment was recorded in Hungary. Labor input is one of the three main production factors followed by Land and Capital. Decrease in labor force input by the same level of production results in higher productivity. The value added is important as it creates value for society, has positive effect on job creation and business performance. The majority of utilized agricultural area UAA in Slovakia (75%) is cultivated by large farms – agricultural holdings – with 1200 ha per farm on average. Therefore, although subsidies in form of direct payments per hectare are lower than in old EU member states, the payment per farm is one of the biggest in EU. This negatively affects the motivation of farms in Slovakia to create value added and farms focus on production of commodities well suited for large farming. While the structure of farms in Slovakia differs from the EU-28, also the measures implemented through CAP result different in Slovakia. Farmers are not motivated to produce while the intensity of support is increasing. Keyword: Farm Income, Employment, Productivity of Farms JEL classification: Q12, Q14 https://doi.org/10.15414/isd2018.s6.03 INTERNATIONAL SCIENTIFIC DAYS 2018