Assessing Impacts of CAP Subsidies on Financial Performance of Enterprises in Slovak Republic

Abstract

Sustainability is a particularly crucial factor in policy formulation and analysis, including in the EU's common agricultural policy. The common agricultural policy, through a subsidy policy, has caused a significant proportion of public funding to flow to agricultural subsidies, so it is appropriate to focus on the effect of these subsidies in the context of the sustainable development of EU agriculture. The impact of agricultural subsidies on business performance is of interest to policy makers. In agrarian practice, insufficient attention is paid to the legal form of agricultural performance, so our economic analysis focused on this area of research. The aim of the paper was to evaluate the effect of financial support in the form of subsidies resulting from the EU's common agricultural policy and to verify its connection with the performance of agricultural enterprises in terms of the legal form in the context of sustainable development of the agricultural sector in Slovakia. No statistically significant linear correlation was found between farms' performance results and the volume of subsidies per hectare of agricultural land for each legal form throughout the reporting period. In each analyzed year, business companies achieved a better overall assessment than agricultural cooperatives based on monitored parameters.