THE USE OF CAPITAL AND CONDITION OF ECONOMICALLY WEAK FARMS IN THE SELECTED CENTRAL AND EASTERN EUROPEAN COUNTRIES

This paper shows the economic situation of economically weak farms in 8 countries of Central and Eastern Europe (CEE) in 2010. The data were obtained from the survey on EU farms carried out under the FADN system. The study included countries in which economically weak farms were the dominant farm type (i.e. Bulgaria, Estonia, Hungary, Latvia, Lithuania, Poland, Romania and Slovakia). The aim of the study was to assess the economic performance of those farms and indicate advantages of the competing farm types. The analysis was performed in terms of total factor productivity, income levels, assets and debt level. The influence of CAP instruments on management efficiency was also demonstrated. The study found a high diversity in terms of production potential as well as financial condition of farms in particular countries, whereas one point of correspondence between farms is the prevalence of fixed assets, i.e. an excessive assets-to-area ratio, and the dominance of own capital in financing those assets. Romanian, Polish and Bulgarian farms are characterised by the highest efficiency of use of current outlays and, in turn, a lower cost of the production unit, which accounted for 66%, 86% and 87% of the output value respectively. In Latvia, Estonia and Slovenia, the costs exceeded the output value by 6%, 7% and 23% respectively and, as a result, the income of those farms was generated exclusively due to subsidies.