Diversification into non agricultural activities under the conditions of slovakia
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Diversification into non-agricultural activities under the conditions of Slovakia. Stanislav Buchta, Zuzana Federičová Miriama Cibulková. Basic terms and concepts.

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Diversification into non-agricultural activities under the conditions of Slovakia

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Diversificationintonon-agriculturalactivitiesundertheconditionsof Slovakia

Stanislav Buchta, Zuzana Federičová

Miriama Cibulková


Basicterms and concepts

  • DiversificationIf country / company / a businessdiversifies , itincreasestherangeofgoods or servicesitproduces

  • BeneficiarySomeonewhogetsadvantagesfromanaction or change

  • Legal person

  • Natural person


  • Thediversificationofproductioni.e. cultivationofvariouscommoditiesatthesametime

  • Diversification by increasingtheshareofincomefromnon-agriculturalactivities in thetotalreceiptsoffarminghouseholds has become a more commonphenomenon.

  • Diversificationofagriculturalactivities has improvedtheeconomicopportunities and socialconditionsofruralinhabitants.

  • According to theRuralDevelopment in theEuropeanUnion, Statistical and EconomicInformationand Report 2006, almost 31% offarmershaveothergainfulactivitiesapartfromtheagriculturalones.

  • Thepercentage over 50% ishigher in manycountries and regions (Slovenia, Sweden, Cyprus, Malta , Germany)


Aim and methodology

  • ThepaperanalyzesthediversificationactivitiescomingfromtheFarmStructureSurvey

  • And analyzesthediversificationimplementation in thesectoralprogrammedocumentsinthepre-intergation and post-integrationperiod

  • Theanalysescontainspersonalattitudes and opinionsofthemeasurebeneficiariescentred on thediversificationsupport in 2004-2006


AnalysisofdiversificationactivitiesfromtheFarmStructureSurvey

  • Thediversificationactivitiesincreasedfrom 34,2% (2003) to 35,2% in alllegalformsin 2007

  • Theactivitieswerespread more by legalpersons (52,8%) than by registerednaturalpersons (30,1%)

  • In 2007, everysecondlegal person and everythirdnatural person and everythirdfarm(35,2%) ofthetotal 8900 farms in agricultureshowedsomeothergainfulactivities.


  • Diversificationactivities in thelegalpersons’farmswere almost two times higher than in the farms of the registered natural persons

  • Theslightlyhighershareofdiversificationwasregistered in thelowproductionregionswhereitiseconomicallynecessary to addothergainfulactivitiestotheagriculturalproduction

  • In 2007, farmsoflegalpersonsapparentlypredominated over thefarmsofnaturalpersons in alldiversificationactivitiesexcepthandcriftwiththebalancedproportion.

    The most predominatingdiversificationactivitiesoflegalpersonsweresaleofagriculturalproductsforenergyproduction (10,3 times more by legalpersonsthanbynaturalpersons), processingoffarmproducts (3,1 times more) and contractualwork (3 times more).


The most commondiversificationactivities are concentrated in theproductiveregionsasfollows:

  • Processingoffarmproducts

  • Contractualwork

  • Saleofagriculturalproductsforenergyproduction

    And in thelessproductiveregions:

  • Agrotourism and ruraltourism

  • Woodprocessing


Analysisofpublicexpendituresintothediversification-orientedprojects

  • In thepre-integration and theshortenedbudgetaryperiod, thediversificationwasfinancedfromtheprogrammes SAPARD, theSectoralOperationalProgrammeAgriculture and RuralDevelopment (SOP ARD) 2004-2006 and theRuralDevelopmentPlan 2004-2006.

  • In lastthreeyears, theexpenditurefordiversificationacceleratedsignificantly and wereincreasingyear on year.

  • Thehighestamountwasdrawn in 2008 (275,5 million SK)

  • In the new programmeperiod 2007-2013 , 122,16 million € are planned to beallocatedintothediversificationof non- agriculturalactivities, thatis 4,8% ofthetotalpublicsupport set in theprogramme.

  • Publicexpenditureswithprivatefinancingofthebeneficiaries are supposed to be 244,32 million €


Annualdrawing in diversificationfromtheSapardprogramme, SOP ARD 2004-2006 and RuralDevelopmentPlan 2004-2006


Analysisofthe RDP 2007-2013 projects in theMeasure 3.1 “Diversification into non-agricultural activities”

  • There were 271 submitted projects

  • 271 projectswererequested by 260 enterprises, ofwhich 119 (46%) werebusinesscompanies, 100 (38%) privateindividualfarmers and 41 (16%) cooperativefarms


Applicantsfornon-repayablefinancialcontributionfrom RDP 2007-2013 which has alreadybenefitedfromthe SOP ARD


Conclusion

  • Diversificationofruraleconomyformsthebasicaim in order to preserve and improvethebalancedjobopportunitiesandsocialconditionsofruralpopulation

  • In 2007, everythirdfarmofthetotal 8900 farms had othergainfulactivities

  • In thepre-intergration and theshortenedbudgetaryperiod, thediversificationareaabsorbed 947 billion SKK fromtheEuropeanfunds


  • Thegreatprojectpotentialofdiversification has appeared in the new programmeperiod , where 271 projectsfordiversificationhavebeensubmitted in theamountof 127,9 million €

  • Regardingthequestions (on thediversificationmeasure) howthediversification has influencedtheemployment, twothirdsoftherespondentsrepliedthatthecontribution had supportedformingof new jobs

  • Twothirdsofenterprisesco-financedtheinvestmentthrough bank credits and onethirdusedtheirownfinantialsourcesforco-financingthediversificationactivities


REFERENCES


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