preprints.org > business, economics and management > other > doi: 10.20944/preprints202307.0928.v1

Preprint Article Version 1 Preserved in Portico This version is not peer-reviewed

Version 1 : Received: 10 July 2023 / Approved: 12 July 2023 / Online: 13 July 2023 (11:17:36 CEST)

The objective of the analysis carried out in this paper is to quantify the impact of subsidies on the activity of two vegetable farms, of different sizes in terms of agricultural area under cultivation, 600 ha and 3000 ha, which can constitute a model at macroeconomic level, indicating the ways in which these farms can ensure their income. For the analysis carried out, indicators were taken into account concerning production, net profit and subsidies received over a period of three years for the agricultural crops grown on these farms, identifying their contribution and effects on profitability. Descriptive statistics, visual inspections and basic comparison methods were also used, thus determining the patterns of the impact of subsidies and their variation for each of the existing crops in the vegetable farms studied. The data on which the statistical models are based are extracted from the financial statements of the farms analysed, giving the possibility of a predictive extension of the evolution of income and, very importantly, of their profitability. The conclusions revealed, for the 600 ha vegetable farm, that this farm maintained its area constant during the analysis period, benefiting from annual subsidies, and that the practice of crop diversification (rape, barley, winter wheat, oats, soybean, maize, lucerne), appropriate rotation, conservation farming and crop irrigation on 85.34% of the area, ensured average yields/ha that exceeded those recorded at national and regional level, except for 2020. The economic performance of this farm is oscillating in the period 2018-2021, with the ability to consistently generate profit, but in 2020 it is close to break-even, a year in which subsidy income tipped the balance towards positive but modest financial results. For this farm, the statistical model carried out was inconclusive because the farm optimises its cropping plan every year, depending on agrometeorological predictions, subsidy levels and market trends, changing crops, thus not being able to estimate the extent to which each crop contributes to maintaining the financial balance of the farm. Thus, although subsidies have impacted the level of net income, the extent to which they have done so is unclear. For the 3000 ha farm, the findings revealed that this farm also has a roughly constant area in use over the analysis period and for which it receives subsidies. This farm practices crop diversification (rape, barley, winter wheat, sunflower, soybean, grain maize, late potatoes, sweet potato, carrot and flowers) and adequate crop rotation. The data highlight that subsidies played a significant and sometimes overwhelming role in determining the gross output of each crop to achieve a positive value of this indicator. Modern conservation farming technologies and crop irrigation on 74.14% of the area justify the average yields/ha achieved, which again exceeded those recorded at national, regional and county level, with the exception of 2020. Maize and soybean crops consistently contributed to the farm's income, with a high gross product and net income, despite changes in the average yield per hectare achieved each year. Good and rising economic performance for this farm during the period under review, which justifies the profitability of the business from an economic, financial and commercial point of view. Although there have been fluctuations in the value of yields realized on different crops, net revenues continued to be high and even up significantly in 2021. Thus, the study highlighted and identified trends and patterns in agriculture, patterns that can serve as a source of information for relevant policy decisions, playing a key role in guiding future research and allocating resources efficiently in the agricultural sector.

agricultural holding; profitability; turnover; subsidies; descriptive statistics

Business, Economics and Management, Other

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