Impact of Direct Payment Reform of CAP 2014-2020 on the Economy of Agricultural Enterprises in Slovakia
Through the instruments of the EU budget is a large volume of financial resources allocated in the national economy. More than 40% of this budget is allocated to address the priorities and the objectives of the CAP of the EU. Specification of objectives in the form of food production, sustainable management of natural resources, impacts of climate change and balanced regional development in Europe requires the formulation and methodology for establishing a single market for agricultural commodities and food. In this respect, the reform of CAP direct payments post 2013 is a significant help in sense of progressive reduction and capping of the direct payments. As confirmed by the results of the analyzed companies progressive reduction and capping direct payments (direct payments without taking into account the greening aspect) is in the accordance with the priorities and objectives of the EU's CAP. The results of the analysis have proved that only 4.95% (56) companies would had been affected by a reduction of direct payments in the calendar year 2010 according this structure:by 20% for the tranche of more than 150 000 EUR and up to 200 000 EUR - 19 enterprisesby 40% for the tranche of more than 200 000 EUR and up to 250 000 EUR - 17 enterprisesby 70% for the tranche of more than 250 000 EUR and up to 300 000 EUR - 4 enterprisesby 100% for the tranche of more than 300 000 EUR - 16 enterprises. The primary goal of enterprises in agriculture should be food production and production of other technical products for energy purposes. Therefore agricultural business is a production system. Non-commercial functions of agriculture are contribution to sustainable development, environmental protection and support of rural areas. Fulfilling these objectives assumes a developed agriculture, viable and dynamic rural communities and sustainable and balanced socioeconomic development in the state and region. The farms, which contribute to the achievement of the objectives are not negatively affected by the progressive reduction and capping direct payments. Characteristic parameters such as sales per hectare of land and labor costs per hectare in these companies significantly differ from the companies affected by new CAP presented on 12th October 2011. The key problem of the Slovak agriculture is not the analyzed EU CAP reform, but historical approach of direct payments between the EU countries. Also the fact that agricultural policy done at the national level is two steps behind other EU member states. Especially in sense of programs offered and institutions, ensuring the implementation of the EU's CAP. (original abstract)
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