The role of farm size in production efficiency: evaluating the farms in Czechia since the EU accession

Abstract

The paper aims to evaluate the economic situation of Czech farms since the EU accession and to identify the impact that the farm size has on economic indicators. The analysis was based on our own database of farms sorted according to the acreage of utilised agricultural land. The analysis focuses on the structure of production, production indicators, asset and capital structure, profitability and cost ratios, the efficiency of production factors, financial stability and financial health. The profitability is characterised by significant fluctuations, with the largest decline in 2009. The company's financial health has a growing trend in all size groups although the average farm did not get out of the grey zone. Dependence on subsidies is growing; subsidies per hectare of utilised agricultural area are growing over time and towards a declining farm size. Trends are similar for all farm size groups; however, in some indicators, the smallest average farm differs. The share of fixed assets is the lowest, and the turnover rate of fixed assets increases. It is the only group with no significant decline in the workforce, and the share of leased land is also the highest. The development of profitability and financial health does not indicate significant differences affected by the size of the farm.

Keywords

• farm size
• profitability
• labour productivity
• subsidies