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Assessment of economic efficiency of conventional and organic agricultural enterprises in a chosen region

Author

Listed:
  • Ivana Brožová

    (Department of Economics, Faculty of Economics and Management, Czech University of Life Sciences in Prague, Kamýcká 129, 165 21 Praha 6 - Suchdol, Czech Republic)

  • Jiří Vaněk

    (Department of Information Technologies, Faculty of Economics and Management, Czech University of Life Sciences in Prague, Kamýcká 129, 165 21 Praha 6 - Suchdol, Czech Republic)

Abstract

The present paper is aimed at assessing the economic efficiency of organically farming agricultural enterprises in a chosen region of the Czech Republic. The results recorded in the organic farming sector were confronted both with conventional agriculture and FADN (Farm Accountancy Data Network) enterprises in the respective region. Economic efficiency has been evaluated firstly by means of a production base (equity, assets, and liabilities). Secondly, profit indicators (operating profit, accounting profit) have been employed while monitoring the share of profitable and loss-making farms. Different profitability ratios were calculated per one hectare of farmland in order to provide a thorough comparison with conventional farming. Last but not least, the research strived to assess the overall economic and financial situation of agricultural enterprises by means of the following ratios: profitability, liquidity, indebtedness, interest coverage and total assets turnover. Following the research findings, several suggestions related to the database improvement and subsequent profitability assessment in the sector were formulated.The findings presented in the paper were obtained as a result of the Research Program titled Economy of the Czech Agriculture Resources and Their Efficient Use within the Framework of the Multifunctional Agri-food Systems of the Czech Ministry of Education, Youth and Sports number VZ MSM 6046070906 and Grant No. 20121057 of the Internal Grant Agency titled Organic Farming - Map Portal Presentation Opportunities.

Suggested Citation

  • Ivana Brožová & Jiří Vaněk, 2013. "Assessment of economic efficiency of conventional and organic agricultural enterprises in a chosen region," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 61(2), pages 297-307.
    • Handle: RePEc:mup:actaun:actaun_2013061020297
    DOI: 10.11118/actaun201361020297
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    References listed on IDEAS

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    1. Subal Kumbhakar & Efthymios Tsionas & Timo Sipiläinen, 2009. "Joint estimation of technology choice and technical efficiency: an application to organic and conventional dairy farming," Journal of Productivity Analysis, Springer, vol. 31(3), pages 151-161, June.
    2. Vonne Lund & Sven Hemlin & William Lockeretz, 2002. "Organic livestock production as viewed by Swedish farmers and organic initiators," Agriculture and Human Values, Springer;The Agriculture, Food, & Human Values Society (AFHVS), vol. 19(3), pages 255-268, September.
    3. Madau, Fabio A., 2005. "Technical Efficiency in Organic Farming: An Application on Italian Cereal Farms Using a Parametric Approach," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24545, European Association of Agricultural Economists.
    4. Madau, Fabio A., 2007. "Technical Efficiency in Organic and Conventional Farming: Evidence from Italian Cereal Farms," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 8(1), pages 1-17, January.
    5. Kerselaers, Eva & De Cock, Lieve & Lauwers, Ludwig & Van Huylenbroeck, Guido, 2007. "Modelling farm-level economic potential for conversion to organic farming," Agricultural Systems, Elsevier, vol. 94(3), pages 671-682, June.
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