ECONOMIC VIABILITY OF DAIRY FARMS IN SELECTED EUROPEAN UNION COUNTRIES

Abstract

The aim of the study was to assess the economic viability of farms specializing in dairy cattle breeding in countries with the highest share of milk production in the EU. Viability was measured using two models based on the opportunity cost of unpaid labour and equity. The study used a comparative analysis of farm viability indicators calculated on the basis of data collected in the FADN system in 2008-2017, taking changes in income in the short and long term into account. The research indicates that farms with greater economic potential were characterized by higher economic viability. Italian and Polish farms with an economic size of EUR 100,000-500,000 were considered viable and developing, as well as Italian and German farms from the group of over EUR 500,000. British and French farms were characterized by a lack of viability. The results were largely influenced by differences in the level of average wages in the national economy of the analysed countries, inputs of unpaid labour and the level and volatility of income.

Keywords

• family farm
• income
• opportunity costs
• unpaid labour
• own capital
• development