Inequalities in economic potential and the level of direct payments in dairy farms from selected EU countries

Abstract

The main aim of the article is to present the state and changes in economic potential, achieved economic results and level of direct payments received by dairy farms in selected EU countries in the period 2005–2016. Economic indicators that are useful in assessing the resources and economic effects of agricultural activity were used to achieve the objective. The source of the empirical materials used in the conducted analysis were accountancy data from farms within the European FADN system. Additionally, to focus more clearly on the research problem, observations were limited to farms specializing in milk production, from only six countries with the highest increase in milk production over 2005–2015. The results show that the production and economic potential of the average farms focusing on milk production from countries significant in this activity were characterised by the fact that: 1) it was highly diverse, and Polish farms in this regard were, on average, the weakest; 2) over the 11 year analysed period (2005–2016), differences between countries were reduced to a limited extent, 3) Danish farms had the highest property value, however it was financed to a large extent by obligations. The highest income from farms in 2016 was, on average, generated by farms in Ireland (EUR 60,192) and Germany (EUR 40,640). On average farms in Poland focused on milk production were characterised by the low profitability of their own work. Despite the functioning of the Common Agricultural Policy in the EU, the method of calculating and the level of direct payments addressed to farms oriented at milk production in individual EU countries was highly diverse. In all the analysed countries, the subsidies for the operating activities for the average farm focused on milk production constituted a significant part of the income for that farm.