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Diversification into non-agricultural activities under the conditions of Slovakia

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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  1. Diversificationintonon-agriculturalactivitiesundertheconditionsof Slovakia Stanislav Buchta, Zuzana Federičová Miriama Cibulková

  2. Basicterms and concepts • DiversificationIf country / company / a businessdiversifies , itincreasestherangeofgoods or servicesitproduces • BeneficiarySomeonewhogetsadvantagesfromanaction or change • Legal person • Natural person

  3. 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)

  4. Aim and methodology • ThepaperanalyzesthediversificationactivitiescomingfromtheFarmStructureSurvey • And analyzesthediversificationimplementation in thesectoralprogrammedocumentsinthepre-intergation and post-integrationperiod • Theanalysescontainspersonalattitudes and opinionsofthemeasurebeneficiariescentred on thediversificationsupport in 2004-2006

  5. AnalysisofdiversificationactivitiesfromtheFarmStructureSurveyAnalysisofdiversificationactivitiesfromtheFarmStructureSurvey • 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.

  6. 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).

  7. The most commondiversificationactivities are concentrated in theproductiveregionsasfollows: • Processingoffarmproducts • Contractualwork • Saleofagriculturalproductsforenergyproduction And in thelessproductiveregions: • Agrotourism and ruraltourism • Woodprocessing

  8. Analysisofpublicexpendituresintothediversification-orientedprojectsAnalysisofpublicexpendituresintothediversification-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 €

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

  10. 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

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

  12. 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

  13. 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

  14. REFERENCES

  15. THANK YOU FOR YOUR ATTENTION

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