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

Diversificationintonon-agriculturalactivitiesundertheconditionsof Slovakia

Stanislav Buchta, Zuzana Federičová

Miriama Cibulková


Basic terms and concepts

Basicterms and concepts

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

  • BeneficiarySomeonewhogetsadvantagesfromanaction or change

  • Legal person

  • Natural person


Diversification into non agricultural activities under the conditions of slovakia

  • 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

Aim and methodology

  • ThepaperanalyzesthediversificationactivitiescomingfromtheFarmStructureSurvey

  • And analyzesthediversificationimplementation in thesectoralprogrammedocumentsinthepre-intergation and post-integrationperiod

  • Theanalysescontainspersonalattitudes and opinionsofthemeasurebeneficiariescentred on thediversificationsupport in 2004-2006


Analysis of diversification activities from the farm structure survey

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.


Diversification into non agricultural activities under the conditions of slovakia

  • 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).


Diversification into non agricultural activities under the conditions of slovakia

The most commondiversificationactivities are concentrated in theproductiveregionsasfollows:

  • Processingoffarmproducts

  • Contractualwork

  • Saleofagriculturalproductsforenergyproduction

    And in thelessproductiveregions:

  • Agrotourism and ruraltourism

  • Woodprocessing


Analysis of public expenditures into the diversification oriented projects

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 €


Diversification into non agricultural activities under the conditions of slovakia

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


Diversification into non agricultural activities under the conditions of slovakia

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


Diversification into non agricultural activities under the conditions of slovakia

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


Conclusion

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


Diversification into non agricultural activities under the conditions of slovakia

  • 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

REFERENCES


Diversification into non agricultural activities under the conditions of slovakia

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