Common Agricultural Policy Subsidies Research Articles

Will common agricultural policy support save farm employment in the wine sector?

ABSTRACT The aim of this paper is to analyze whether different types of Common Agricultural Policy (CAP) subsidies maintained jobs or even created them on wine farms during the years 2013–2019 using a Hungarian Farm Accountancy Data Network panel dataset. Farm employment is separated into paid and unpaid labor. The initial decline in farm employment during the first three years of analysis was due to the decline in paid labor, but later there was rather stable development in both paid and unpaid labor. The dynamic panel regression results confirm that the employment in the previous year is the crucial driver for the employment of labor on wine farms. CAP subsidies for direct payments to farmers and, to a lesser extent, economic farm size, are positively associated with the employment of paid labor (and thus the employment of total wine farms-related labor), but not with employment of unpaid labor, and vice versa rented land share. These results and findings are robust independent of year-fixed effects. While CAP subsidies for direct payments to farmers supported the maintenance or increase in paid labor employment on wine farms, trade-offs arose regarding the efficiency of wine farms and their entrepreneurial-, innovation-, and market-added value-chain efforts.

The Common Agricultural Policy (CAP) in Extremadura (SW Spain) during the Period 2014–2020:New Opportunities for Economic Diversification in Rural Areas?

The Common Agricultural Policy (CAP) is a European policy created in the early 1960s to address the food and economic problems affecting European society and the agricultural sector in particular. Throughout its history, the various reforms carried out in this policy have oriented it towards a reduction of direct aid to farmers’ production (due to its excessive cost, among other reasons), in favor of income-related aid. In recent years, the agricultural sector in Extremadura has received CAP aid in a very unequal manner, with a more significant concentration in the agricultural areas where intensive production has been established as a base and where there is a larger population. Thus, the main objective of this research is to analyze the spatial relationships between CAP subsidies and other demographic, economic and social context variables. To achieve the proposed objective, a spatial regression model, namely Geographically Weighted Regression (GWR), has been calculated to determine the relationship between the amounts received from the CAP and the socioeconomic situation of each of the municipalities in the region. The results show a concentration of this aid in the most dynamic areas, with municipalities with a larger population and a more productive agriculture, mainly related to irrigated farms.

The impact of CAP subsidies on the productivity of cereal farms in six European countries: A historical perspective (2008–2018)

Productivity is an always-hotly-debated issue within the EU agricultural policymaking, particularly concerning the effect of subsidies distributed via the Common Agricultural Policy (CAP). The cereal sector is under particular political scrutiny nowadays, with the Ukraine conflict and environmental issues menacing food security levels for both developing and developed countries.Using individual farm data from 2008 to 2018 for France, Germany, Italy, Poland, Spain, and the United Kingdom, we investigate the effects of different subsidies on the cereal farms’ productivity, accounting for the intrinsic farms’ productivity levels (low, medium and high productive farms). The System-GMM estimator, combined with Inverse Mills Ratios, is applied within a three-step strategy to overcome endogeneity problems. Results highlight how CAP subsidies affect farms’ Total Factor Productivity (TFP), and to what extent they differ according to the nature of the subsidy, the country, and, interestingly, the intrinsic farm’s productivity level. The analysis reveals that TFP embeds an autoregressive behaviour that should always be accounted for when assessing the relationship with subsidies. Most of the CAP subsidies entail a negative-to-unsignificant effect on TFP, except for agri-environmental subsidies, which can increase farms’ productivity. Interestingly, the negative role of direct payments seems more recurrent in the low productive farms, accelerating their exit from the market.

The common agricultural policy subsidies and the technical efficiency of Hungarian wine farms

PurposeThe literature argues on ambiguous impacts of different types of the common agricultural policy (CAP) subsidies on farm technical efficiency (TE). The purpose of this paper is to estimate and analyse the TE and the impact of the CAP subsidies on the TE of wine farms in Hungary using the farm accountancy data network data set in the period 2013–2019.Design/methodology/approachThe authors use stochastic frontiers analysis (SFA) models to estimate the TE scores for the Hungarian wine farms with four wine farm-level inputs in terms of agricultural land, labour, capital and intermediate consumption. The TE scores are explained by the CAP subsidies and economic wine farm size. The different SFA models were applied with robustness tests to investigate the drivers of the TE values of wineries.FindingsLike for Hungarian farms in general, the distribution of the wine farm structure is a dual with a greater number of smaller wine farms and a smaller number of bigger wine farms. The agricultural land, capital and intermediate consumption are significantly positively associated with the wine farm TE. With higher capital intensity wine farm TE increase. The results imply that the CAP subsidies decrease the TE of the Hungarian wine farms, whereas economic farm size increase.Originality/valueTo the best of the authors’ knowledge, this is one of the first specific efficiency studies on the wine sector in the Central and Eastern European region and the first one for Hungary to evaluate the TE at wine farm level and to assess the impact of CAP subsidies and economic farm size on wine farm (in)efficiency to apply production technologies and use farm resources. This study is among the first that applied the fixed-effects stochastic frontier model at the wine farm level to measure the drivers of the TE scores.

The dark side of the Common Agricultural Policy

The dark side of the Common Agricultural Policy

Europe’s Large-Scale Land Acquisitions and Bibliometric Analysis

The agricultural sector in the European Union is largely characterized by a declining number of farms and an increasing size of surviving farms. The land is concentrating under the usage of fewer large agricultural producers. Meanwhile, a broad distribution of land ownership is the basis for the welfare of local economies and rural communities. Land distribution is one important component that guarantees our right to food, human rights, and sustainability in agriculture. The aim of this paper was to compile a systematic review of the existing literature on large-scale land acquisitions in Europe. The results are based on two different search methods. Firstly, documents and articles on large-scale land acquisitions were studied and, secondly, keyword research from the SCOPUS database and analysis using VOSviewer where performed. This study shows that large-scale land acquisitions are closely related to food security, human rights, global governance and international law, land tenure, biofuel production, and financialization through European Union common agricultural policy subsidies and foreign direct investments.

A Composite Indicator to Assess Sustainability of Agriculture in European Union Countries

Few studies have been conducted to assess agricultural sustainability in the European Union (EU), and all of them fail to provide a holistic view of sustainability in a relevant temporal horizon that could effectively support the design of policies. In this paper, a composite indicator is constructed based on the geometric aggregation of 12 basic indicators measured yearly in the period 2004–2020 (17 years) on all EU countries plus United Kingdom, with weights determined endogenously according to the Benefit of Doubt (BoD) approach. Our composite indicator has a two-level hierarchical structure accounting for the contributions of the economic, social and environmental dimensions of sustainability. In our results, Bulgaria, Croatia, Lithuania and Poland are the countries with the strongest growth rate of sustainability, while countries reaching the 90th percentile of the score in sustainability include Austria, Czechia, Estonia, France, Germany, Hungary, Latvia, Lithuania, Slovakia and Sweden. In overall, the social and the environmental dimensions have similar levels, while the level of the economic dimension is definitely higher. Interestingly, several countries with a high level of sustainability are characterized by a decline of the economic dimension, including Austria, Finland, Italy, Latvia and Slovakia. The reliability of our composite indicator is supported by the substantial agreement of sustainability scores with subsidies attributed by the Common Agricultural Policy (CAP). Therefore, our proposal represents a valuable resource not only to monitor the progress of EU member countries towards sustainability objectives, but also to refine the scheme for the attribution of CAP subsidies in order to stimulate specific sustainable dimensions.

Detection of grassland mowing frequency using time series of vegetation indices from Sentinel-2 imagery

ABSTRACT Management intensity deeply influences meadow structure and functioning, therefore affecting grassland ecosystem services. Conservation and management measures, including European Common Agricultural Policy subsidies, should therefore be based on updated and publicly available data about management intensity. The mowing frequency is a crucial trait to describe meadows management intensity, but the potential of using vegetation indices from Sentinel-2 imagery for its retrieval has not been fully exploited. In this work we developed on the Google Earth Engine platform a four-phases algorithm to identify mowing frequency, including i) vegetation index time-series computing, ii) smoothing and resampling, iii) mowing detection, and iv) majority analysis. Mowing frequency during 2020 of 240 ha of grassland fields in the Italian Alps was used for algorithm optimization and evaluation. Six vegetation indexes (EVI, GVMI, MTCI, NDII, NDVI, RENDVI783.740) were tested as input to the proposed algorithm. The Normalized Difference Infrared Index (NDII) showed the best performance, resulting in mean absolute error of 0.07 and 93% overall accuracy on average at the four sites used for optimization, at pixel resolution. A slightly lower accuracy (mean absolute error = 0.10, overall accuracy = 90%) was obtained aggregating the maps to management parcels. The algorithm showed a good generalization ability, with a similar performance between global and local optimization and an average mean absolute error of 0.12 and an overall accuracy of 89% on average on the sites not used for parameters optimization. The lowest accuracies occurred in intensively managed grasslands surveyed by one satellite orbit only. This study demonstrates the suitability of the proposed algorithm to monitor very fragmented grasslands in complex mountain ecosystems. Google Earth Engine was used to develop the model and will enable researchers, agencies and practitioners to easily and quickly apply the code to map grassland mowing frequency for extensive grasslands protection and conservation, for mowing event verification, or for forage system characterization.

Do different types of Common Agricultural Policy subsidies promote farm employment?

This paper investigates the impact of Common Agricultural Policy (CAP) subsidies on farm employment in Hungary and Slovenia. Econometric models were estimated separately for total farm labor, family labor, and hired labor. We find that total subsidies and, within these, Pillar I subsidies, have positive effect on farm employment of paid labor in Hungary and family labor in Slovenia. Irrespective of the country and type of employment, farm employment is significantly positively associated with farm size. Mixed results are found for Pillar II and investment subsidies. Rural development measures with agri-environmental and less favored area subsidies, and investment subsidies are particularly important for the family farm labor in Slovenia, but not for the paid labor, neither the family farm labor in Hungary. The impact of control regional labor market variables is mixed between the employment of family farm and paid labor within and between the analyzed countries. A strong link between main type of farm employment, different types of CAP subsidies and farm size suggests on the importance of CAP subsidies for maintaining of farm employment and job creation for young and unemployed, and land use policy. This might explain farmers political demand for status quo with only minor CAP subsidy changes, with raising society awareness on monitoring of effective and efficient use of subsidies.

Common Agricultural Policy (CAP) from a Public Health Perspective

Abstract European Common agricultural policy (CAP) can impact several health outcomes like increased antibiotic resistant infections, poor health of farm workers and unhealthy diets which lead to several non-communicable diseases. Rapid literature review of public health recommendations for a new CAP covers several topics from environment, pesticides, livestock and antimicrobial resistance (AMR) to diet, food systems and others. Recommendations on pesticides are to periodically upgrade minimum standards of pesticides, reduce or abandon the use of pesticides and sustainable management of water quality in agriculture. In relation to livestock and antimicrobial resistance, EU should dedicate financial resources for programmes aimed at decreasing animal numbers, stop support for industrial livestock production through CAP subsidies and adopt low-antibiotics farming methods. To ensure better diet and food systems we need sustainable dietary guidelines, food labelling schemes, public procurement of healthy, local and seasonal foodstuffs, food education and campaigns, promoting food systems thinking at all levels, increase productivity of fruit and vegetable cultivation and social innovation in food supply chains. Other recommendations state that CAP should end support for wine sector and that CAP should include training, payment of adequate wages and health and safety standards, and lastly implementation of Health impact assessment of CAP. Agricultural policy is a very complex field with many stakeholders and consequently also implications on many levels. To make health a more visible and important objective, we need more public health experts to take part in advocacy for healthier CAP.

AUTOMATED CLASSIFICATION OF CROP TYPES AND CONDITION IN A MEDITERRANEAN AREA USING A FINE-TUNED CONVOLUTIONAL NEURAL NETWORK

Abstract. Crop classification based on satellite and aerial imagery is a recurrent application in remote sensing. It has been used as input for creating and updating agricultural inventories, yield prediction and land management. In the context of the Common Agricultural Policy (CAP), farmers get subsidies based on the crop area cultivated. The correspondence between the declared and the actual crop needs to be monitored every year, and the parcels must be properly maintained, without signs of abandonment. In this work, Sentinel- 2 time series images and 4-band Very High Resolution (VHR) aerial orthoimages from the Spanish National Programme of Aerial Orthophotography (PNOA) were combined in a pre-trained Convolutional Neural Network (CNN) (VGG-19) adapted with a double goal: (i) the classification of agricultural parcels in different crop types; and (ii) the identification of crop condition (i.e., abandoned vs. non-abandoned) of permanent crops in a Mediterranean area of Spain. A total of 1237 crop parcels from the CAP declarations of 2019 were used as ground truth to classify into cereals, fruit trees, olive trees, vineyards, grasslands and arable land, from which 80% were used for training and 20% for testing. The overall accuracy obtained was greater than 93% both, at parcel and area levels. Olive trees were the least accurate crop, mostly misclassified with fruit trees, and young vineyards were slightly confused with cereal and arable land. In the assessment of crop condition, only 9.65% of the abandoned plots were missed (omission errors), and 7.21% of plots were over-detected (commission errors), having a 99% of overall accuracy from a total of 1931 image subset samples. The proposed methodology based on CNN is promising for its operational application in crop monitoring and in the detection of abandonments in the context of CAP subsidies, but a more exhaustive number of training samples is needed for extension to other crop types and geographical areas.

Assessing agricultural eco-efficiency in Italian Regions

Abstract Agriculture plays a key role in providing a wide range of ecosystem services, such as food, feed, fiber and biofuel, thus taking part in the economic development of countries. On the other hand, this sector also gives rise to negative externalities. The eco-efficiency has been considered as a meaningful index for assessing how efficient economic activities are in terms of resource-use and environmental pressures: measuring eco-efficiency provides policy makers with important information for developing policies focused on sustainable management and efficient use of natural resources in the agricultural sector. In this context, sustainable development is now one of the most important objectives of the European Union Common Agricultural Policy (CAP) that has a key role in facing the challenges of the new paradigm of sustainability of agriculture. In this direction, the aim of this paper is to evaluate the eco-efficiency of the Italian agricultural sector, as an index useful for emphasizing the differences among some national geographical areas. This paper tries to fill the lack of scientific studies on agricultural eco-efficiency in Italy, despite the strategic role played by Italy in Europe. For this purpose, the Data Envelopment Analysis (DEA) methodology was used, focusing on the integration between agricultural productivity and resource conservation, in order to develop a support tool for policy makers and managers. The analysis had shown a better orientation in saving resources for the Southern Regions and a greater orientation in productivity for the Northern Regions. Overall, Italy seems to have a good capacity for sustainable management of agricultural resources although there is still space for improvement. In this regard, the measurement of eco-efficiency provides a useful index for policy makers to achieve better performances in terms of agricultural sustainability. This means that CAP subsidies should be granted in exchange for specific environmental externalities provided by farmers as a result of more ecologically friendly management with a land use planning avoiding the depleting of Ecosystem Services rich areas, allowing for the achievement of a balance between economic growth and ecosystem protection. Although the paper has expanded the literature on agricultural eco-efficiency, this work has some limitations that could serve as a reference for future studies that can include other ecological variables such as the provision of some ecosystem services that can be enhanced or impacted by agricultural development. Finally, the challenge to realize sustainable agriculture can represent a long-term guarantee of food security as well as societal well-being.

Do CAP subsidies stabilise farm income in Hungary and Slovenia?

A large share of the Common Agricultural Policy (CAP) budget takes the form of subsidies for supporting and stabilising the income of European Union farmers. This paper assesses whether CAP subsidies stabilise farm income and examines how subsidies may reduce the variability of farm income over time. The analysis is developed on a constant sample of Hungarian and Slovenian Farm Accountancy Data Network farms during the period 2007–2015. It incorporates both the whole sample and farms classified according to two criteria: economic size, and the relative importance of subsidies. Farm income variability is analysed by means of variance decomposition using three main income components: market revenue income, subsidies, and the cost of external factors. Variability in farm income over time is high due to the high variability in the market revenue component. Subsidies mitigate instability in farm income because their variability is lower than that of market revenue income. While CAP subsidies thus represent a stable source of farm income, they have played a limited countercyclical role in stabilising total farm income. Subsidies are not found to be targeted at the farms that face the highest level of income variability and thus may not be an efficient tool for stabilising farm income.

Conversion to organic farming decreases the vulnerability of dairy farms

AbstractIn the context of the European crisis in conventional milk production, conventional farms potentially dissimilar to organic farming models are converting to organic. This raises the issue of farm vulnerability during and after this conversion, i.e. the farm’s ability to respond to the effects of technical, climatic and economic risks. Our objective was to show whether and how dairy farm vulnerability can decrease during and after conversion to organic farming. We surveyed a sample of 12 dairy farms in Brittany, France, from 2008 (their last year conventional) to 2013. Our method considered farm vulnerability a function of the initial level of and trend in farm self-sufficient milk productivity, economic efficiency, net profitability per worker and independence from European common agricultural policy (CAP) subsidies. We related these vulnerability variables to explanatory variables that illustrated farm exposure to climatic and economic variability and farming practices. The results show that nearly all farms improved their economic efficiency (11/12), about two thirds improved their self-sufficient milk productivity (8/12) and profitability per worker (7/12), and half improved their independence from CAP subsidies (6/12). Farms had diverse vulnerability patterns, with trade-offs between the initial situation and the trend followed during the conversion, and among vulnerability variables. We identified two main adaptation strategies: (i) pasture-based farms that were similar to organic farming models when conventional and that did not change much during the conversion, and (ii) farms based on maize and feed concentrates when conventional that drastically changed. The latter farms had the greatest decrease in vulnerability and improved their self-sufficient milk productivity, profitability per worker, economic efficiency and independence from CAP subsidies. Overall, variability in climatic and economic conditions had less influence on vulnerability than farming practices. Here, we showed for the first time that changing farming practices by converting to organic farming can be a powerful mechanism for reducing farm vulnerability.

Failure of EU Biodiversity Strategy in Mediterranean farmland protected areas

The main populations of several globally threatened bird species survive in Mediterranean agroecosystems. Consequently, a number of areas considered important for the conservation of these birds are currently protected by EU legislation. The European Common Agricultural Policy (CAP), conceived to increase agricultural production, has no restrictions in these protected areas, which creates a conflict between current agricultural policy and legislation on biodiversity conservation. Long-term monitoring of flagship bird species in a Mediterranean protected area shows significant population declines. Similar declines also affect common farmland bird species in others agricultural protected areas, confirming a failure of the EU Biodiversity Strategy. If Europeans want to conserve these landscapes and their biodiversity, the present conservation model should change in farmland areas. Solutions must involve the prohibition of agricultural intensification, and the implementation of sustainable farming practices different from current CAP subsidies.

ENVIRONMENTAL SUSTAINABILITY OF FADN FARMS AND ITS DETERMINANTS

The main objective of the paper is to determine the environmental sustainability of FADN farms and its determinants by determining the effectiveness of the common agricultural policy subsidies for shaping a synthetic index of environmental sustainability. The synthetic index of environmental sustainability for the average farm in the region was determined by the Hellwig method. The differentiation of environmental sustainability has been carried out in three sections: in European regions, EU countries and economic classes. The increase in share of environmental payments and rural development in the total amount of subsidies has proved to be crucial for environmental sustainability, not just the increase in funds for this purpose. There is a general conclusion that single area payments do not help to achieve environmental sustainability, although this is a priority for the EU.

Analysis of the Spatial Organization of Pastures as a Contact Network, Implications for Potential Disease Spread and Biosecurity in Livestock, France, 2010.

The use of pastures is part of common herd management practices for livestock animals, but contagion between animals located on neighbouring pastures is one of the major modes of infectious disease transmission between herds. At the population level, this transmission is strongly constrained by the spatial organization of pastures. The aim of this study was to answer two questions: (i) is the spatial configuration of pastures favourable to the spread of infectious diseases in France? (ii) would biosecurity measures allow decreasing this vulnerability? Based on GIS data, the spatial organization of pastures was represented using networks. Nodes were the 3,159,787 pastures reported in 2010 by the French breeders to claim the Common Agricultural Policy subsidies. Links connected pastures when the distance between them was below a predefined threshold. Premises networks were obtained by aggregating into a single node all the pastures under the same ownership. Although the pastures network was very fragmented when the distance threshold was short (1.5 meters, relevant for a directly-transmitted disease), it was not the case when the distance threshold was larger (500 m, relevant for a vector-borne disease: 97% of the nodes in the largest connected component). The premises network was highly connected as the largest connected component always included more than 83% of the nodes, whatever the distance threshold. Percolation analyses were performed to model the population-level efficacy of biosecurity measures. Percolation thresholds varied according to the modelled biosecurity measures and to the distance threshold. They were globally high (e.g. >17% of nodes had to be removed, mimicking the confinement of animals inside farm buildings, to obtain the disappearance of the large connected component). The network of pastures thus appeared vulnerable to the spread of diseases in France. Only a large acceptance of biosecurity measures by breeders would allow reducing this structural risk.

Translating consumer’s olive-oil quality-attribute requirements into optimal olive-growing practices

PurposeThe purpose of this paper is to translate consumer requirements regarding olive-oil quality attributes into specific olive-growing practices that most contribute to satisfy these attributes.Design/methodology/approachAfter identifying consumer requirements or needs regarding different attributes of olive-oil quality, through a survey of 439 olive-oil consumers, the authors determine the olive-growing practices that optimally satisfy consumer needs through expert opinions. Finally, the use of expert knowledge to construct the House of Quality or the first matrix of quality function deployment allow the authors to define the relative contribution of the various olive-farming practices to the satisfaction of consumer requirements.FindingsThe findings have shown that the olive-oil quality attributes most requested by consumers incorporate organoleptic (e.g. acidity, flavour, colour), sociocultural (e.g. creating employment in rural areas, maintenance of the rural population) and environmental ones (environmental externalities). The “separation of olives collected from ground and trees” (separation), “timing of harvesting” (according to a fruit-ripeness index), the “method of the ground harvest” (no picking from the ground), and the “method of tree harvest” (handpicking) were some of the most commonly identified olive-farming practices that contribute the most to meeting consumers’ needs with regard to olive-oil quality.Research limitations/implicationsThe study suggests detailed analyses of the relationships between customer requirements and other agents practices involved in the olive sector (processing industries: mills, distribution, and marketing management, etc.) to more fully investigate the impact of all these practices on consumers’ perceived olive-oil quality attributes. This is the most reliable way to guarantee that the most sought-after quality characteristics are taken into account, not only in the farming stage but also in the various different stages of the olive agri-food chain.Practical implicationsFindings represent an opportunity in the market value chain to develop a quality olive oil which is more oriented towards the consumer and able to face future segmentations in the market. This is one of the main innovative features of this study, as it offers “good practice” guidelines to agents of the olive-oil sector from the consumer perspective.Social implicationsThis study provides positive implications to consumers, providing them important tools to make an informed choice, and producers and marketers helping the design of production strategies to optimally satisfy the consumer preference with regard to olive-oil quality, and attain a competitive advantage by adding value to the product.Originality/valueThis paper is regarded as the pioneer in the literature translating the “consumer voice” regarding olive-oil quality into specific olive-growing practices “good-practices guidelines”. Thus, the relevant required quality olive-oil attributes should be clearly described on the label, to enable consumers to identify the quality features and make an informed choice. Furthermore, to meet consumers’ needs, the olive-oil sector should focus on the olive-growing practices that optimally satisfy consumer requirements concerning olive-oil quality attributes. This would help to improve legitimacy and boost public support for the Common Agricultural Policy subsidies for the agricultural sector in general, and the olive sector in particular. The findings are particularly valuable in helping policy makers to design marketing strategies to improve the sustainability and competitiveness of Spanish olive oil.

Reshaping agri-environmental subsidies: From marginal farming to large-scale rewilding

Despite continued discussion about market distortions and environmental impacts, agricultural subsidies continue to be a key component of European Union policy. About 10% of the agro-forestry subsidies are targeted at supporting agri-environment schemes, and at supporting farming in Less Favoured Areas (LFA) such as mountain regions. One of the main justifications for these agri-environmental subsidies towards marginally productive land is that they promote the conservation of biodiversity by maintaining low-intensity farming practices. Here, we critically examine this assumption and argue instead for a two-tier approach to Europe's agri-environmental policy based on inherent land fertility and spatial scale: (i) at a local, single-farm scale, fertile agricultural land should preferentially be intensively but sustainably farmed with a focus on high yields, (ii) while simultaneously and at larger, regional scales, less-productive land, and especially protected areas, may be ecologically restored into ‘wild’ and resiliently functioning ecosystems. As such, agri-environmental subsidies towards fertile land should support the implementation of measures that benefit biodiversity while allowing, and even helping, the achievement of high agricultural yields. In contrast, agri-environmental and LFA subsidies towards marginal land and protected areas should also promote rewilding and the management of natural succession. In order for this approach to be successful, a higher proportion of the Common Agricultural Policy subsidies would need to be allocated to environmental goals.

Economic Performance of SME Agricultural Producers in the Context of Risk Management: Focus on Visegrad 4 Member Countries

The long term regulation of the EU agrarian sector via the Common Agricultural Policy (CAP) and its respective instruments focuses on the sustainable development both of the agriculture and rural area as a whole. It is needed above all to stress out the equalization instruments of CAP within the context of negative impacts' diminish of outer sectorial environment in relation with the economic status of agricultural businesses, specifically the small and medium ones. The EU programming period of years 2014-2020 is focused from the view point of the agrarian sector on more efficient CAP to encourage the competitiveness of European farmers. The aforementioned programming period is for agricultural producers from V4 countries the first one when CAP guarantees the maximum amount of operational subsidies for them, of course regarding the respective agreed EU accession treaties. Nevertheless, CAP subsidies cannot be considered to be the key factor of competitiveness within EU single market. The relation between long term increasing of production's inputs on one hand and the decreasing of agricultural producers' prices on the other one can be marked as very important negative aspect within the need of farmers' sustainable competitiveness. So, the direct consequence of a negative influence of aforementioned factor is the subsequent negative direct influence on profitability of agricultural producers. The need for increasing the efficiency of production, marketing and other related processing activities appears to be relevant and inevitable. The business processes are repeated cyclically, that is why there is emerged the need for its systematic and continuous management, measurement, assessment and subsequent changes and optimization. The management of risks has to be involved in the business activities of agricultural businesses regardless their economic size and branch, taking into account possible negative influences. The article aims at identification of instruments for measuring the sustainable economic performance of agricultural businesses via management of risks using secondary economic data. Subsequently, there are defined factors influencing the economic performance of SME agricultural producers settled in the V4 countries using the economic analysis. There are utilized secondary data of Eurostat and official EU documents.