Financial Security of Farms in Selected European Union Countries in the Context of Environmental Protection Requirements

Joanna Bereżnicka

Roczniki (Annals), 2020, vol. 2020, issue 2

Abstract: The article deals with the issue of financial security in an average farm in the Czech Republic, Poland, the Netherlands and Germany. The data collected under the FADN in the period 2013-2017 was used in this work. Financial security was measured using a cash adequacy indicator and the variability of family farm income is used. The work also used the subsidy rate, which determined to what degree farmers could feel safe in financial terms without any subsidies or financial support. Research shows that the worst situation from the perspective of the relationship between cash flows and debt servicing occurred on an average Dutch farm, and the highest sufficiency index was shown by a Polish farm. However, these discrepancies are the result of risk aversion in recent uncertain financial times. If additional requirements for outlays related to environmental protection appear, then the most difficult situation will occur on farms in the Czech Republic and Poland due to the fact that, for them, direct payments constitute a significant source of income. In these countries, a lack of compensation for any possible consequences arising from environmental restrictions may cause a feeling of financial insecurity

Keywords: Agribusiness; Agricultural Finance (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:ags:paaero:308190

DOI: 10.22004/ag.econ.308190

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