Environmental Law & Economics: Agriculture in Slovak Republic 2004

Radovan Kazda
Environmental Policy Analyst
Conservative Institute of M. R. Stefanik

Tuesday, February 08, 2005

Agriculture in Slovak Republic 2004


During the course of 2004, Slovak agricultural enterprise experienced dramatic economic and legislative changes. Slovakia’s accession to the European Union (EU) and its adoption of Common Agricultural Policy (CAP) has res ulted in an array of legislative changes. Some of the new legislation has increased regulations and provided greater subsidies for agribusiness from the national and EU budget.

The comprehensive changes realized in 2004 justify a positive outlook for the future economic performance of Slovak agriculture. While the overall outlook remains positive, the increase in subsidies creates potential risks. Some of the risks include: Corruption, inefficient fund allocation, and non-transparent decision making in the allotment of subsidies.

Although the consistent application of administrative controls and the CAP framework may eliminate certain possibilities for non-transparency and corruption, the potential for problems still exists.

In order to present a comprehensive evaluation of the Slovakia’s agriculture sector for 2004, it is necessary to analyze economic, natural, and climatic indicators that determine the overall economic performance of individual farmers. Such an exhaustive analysis exceeds the space limitation of this chapter, and is not our principal objective. Rather than presenting comprehensive analysis, this report aims to present an account of all relevant events and legislative measures that will affect the agricultural sector’s future economic performance.


A composite evaluation of the agricultural sector’s economic performance is based on a number of economic indicators that account for specifics in the various braches of agricultural production. The principle economic indicators in the agricultural sector include: data on the costs and revenues per production unit (i.e. ton, hectare, etc.), the production volume of particular commodities (in vegetable production it is the average yield per acre, in animal production it is data on the amount of meat, milk, and other commodities), the volume of production inputs (own funds as well as subsidies disbursed from public funds), price development, and other less important indicators.

After the cost of capital and overhead expenses, the primary costs associated with vegetable production are: the purchase of energy, water, and fertilizers, the protection of crops, and ensuring the quality. In livestock production primary costs are derived from: the purchase of quality feed and the protection of livestock health.

Differences in the soil quality and climate have substantial impact on the type of agricultural production in a given region. Slovakia’s accession to the EU and the harmonization of prices over a large geographic area are likely to increase the correlation between weather and a farm’s profit.

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The paper was published in:
Bútora M., Kollár M., Mesežnikov G.: "Slovakia 2004. A Global Report on the State of Society". IVO, Bratislava, 2005

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