Sources of Return on Equity in Economically Diversified Agriculture of the European Union Countries

The study analysed sources of return on equity in countries with strong and economically weak farms. The economic size used in FADN was used as the breakdown criterion. In the group of countries where farms reached a relatively small economic size, there were Bulgaria, Greece, Croatia (from 2013), Malta, Lithuania, Poland, Romania and Slovenia. Farms with a high standard value of production came from the Netherlands, Belgium, the Czech Republic, Denmark, Germany and Slovakia. The studies used panel methods, and the model with fixed effects was used to estimate model parameters. Factors that influenced the return on equity in the group of weaker countries included asset productivity, sales profitability (sales margin) and operating subsidies. In the group of countries with economically stronger farms, the return on equity rate was positively affected by the margin on sales and profitability of production measured by the ratio of total production to total costs and property debt. Which confirms that foreign capital can contribute to achieving positive effects from the perspective of the return on equity.