The Impact of EU Subsidies on the Competitiveness of Slovak Farms from the Perspective of Legal Form

Abstract

Supporting the competitiveness of farms is one of the main priorities of the European Union’s Common Agricultural Policy. Therefore, the analysis of transfer efficiency is an important element in the policy evaluation process. The primary aim of this partial research was to evaluate the development of farms’ competitiveness in Slovakia, considering the financial support from the European Union and focusing on the legal form perspective. We assessed farm competitiveness using the Recourse Cost Ratio coefficient, which compares costs and revenues of entities in Slovakia’s agricultural sector from 2004 to 2019. The analysis revealed statistically significant differences in competitiveness among farms based on their legal forms. From these findings, it is recommended that effective farm management is crucial for enhancing competitiveness, productivity, and profitability across all farms. Despite the specifics of individual legal forms of business, it is important to clarify that it is often the skills and abilities of the management of each enterprise that contribute to better acquisition of financial resources and also strengthen the competitive position of the farm in the market.

Keywords

• competitiveness
• legal form
• subsidies
• European Union
• Slovak Republic