Impact of agricultural support on farm performance: case study of Slovakia

Jozef Palkovič ()
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Jozef Palkovič: Slovak University of Agriculture in Nitra

SN Business & Economics, 2025, vol. 5, issue 12, 1-20

Abstract: Abstract Agricultural support is a crucial component of a farm’s income, accounting for approximately 30% of a farm’s total revenue. The primary objective of the presented paper is to conduct a comprehensive analysis of the impacts of agricultural subsidies on farm performance under specific conditions in Slovakia. This can be characterised as a post-transformation country with a prevalence of corporate farms operating on large areas. The presented paper examines the effects of agricultural support on the development of key economic indicators of Slovak farms, including output, income, profit, labour, loans, productivity, and technical efficiency. The analysis uses farm-level data collected from Slovak farms for the period 2013–2021, as more actual data were not available at the time of research. The analysis of the relationship between subsidies and farm indicators employs regression and correlation analysis, as well as quantile regression, with the following control variables: farm size, farm type, region, and a variable indicating whether the farm received support for young farmers. These methods were used to analyse the diversity of the impact of subsidies across farm distribution. Results reveal a complex relationship between the investigated variables and subsidies, positive associations between subsidies and variables such as income and output, as well as small or insignificant effects on the technical efficiency and productivity of labour. Subsidies significantly affect the income and production of smaller farms. They also significantly influence farms’ access to loans, which play a crucial role in further development, especially for smaller farms. Subsidies focused on larger farms can positively stimulate rural employment, with other positive externalities for rural regions.

Keywords: Agricultural subsidies; Farm performance; Technical efficiency; Economic indicators (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s43546-025-00976-8

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