Impact of Integration and Globalization on Business Risk and loans in Slovak Agriculture

The paper evaluates the effects of integration and globalization on individual farms in Slovakia after EU accession in 2004. The decrease in employment in agriculture is a result of technological progress, changes in individual family preferences and low income in agriculture in comparison to other sectors of economy. In the production commodities with low labor input dominate. Cereals, oilseeds and industrial crops dominate the agriculture production in Slovakia. Large farms benefit in form of economy of scale and agricultural output of farms remains low in Slovakia. The paper compares the risk of crop and animal production based in individual farm data using Markowitz portfolio theory. The crop production is more risky due to higher effects of weather condition compared to animal production. The second part of the paper evaluates the changes on access to credit and finance gap of farms in Slovakia. Based on individual interviews with representatives of demand and supply of loans the paper concludes that large the Common agricultural policy is playing a dominant role in access to credit. Banks consider the CAP subsidies to be a stable income factor and good collateral for loans. The loan market is dominated by short term loans and the majority of the market offers are coming from 4 commercial banks. The finance gap exists towards small farmers and farmers with animal production and special crops

VYVOJ RENTABILITY, LIKVIDITY A AKTIVITY VO VYBRANOM SUBORE POL'NOHOSPODARSKYCH PODNIKOV V ROKOCH 200-2008

The paper evaluates the development of return on equity, cash ratio, and asset turnover ratio in agriculture during the period 2000-2008. For evaluation and analyzes there was used the database from The Research Institute of Agricultural and Food Economics (RIAFE) and a selected sample of 2 250 agricultural companies, which means 20 % out of all agricultural body corporate in Slovakia. The criterion for the selection was the best 250 enterprises per each year in selected ratio performance. The evaluation of Return on equity shows that also agriculture can be attractive for investors especially after joining the EU. But the fact that only 2 enterprises had during the years 2000-2008 the best ROE performance needs to be taken into account. The range of generally recommended values for cash ratio is 0.2--0.6 or 0.8. Agricultural enterprises suffer from low liquidity; however the results show that there is a difference between the years 2000-2003 and 2004-2008. After entering the EU the cash ratio increased to higher values than generally recommended. Asset turnover ratio on the other hand decreased after entering the EU in 2004

MEASURING SYSTEMATIC RISK OF UNQUOTED AGRICULTURAL FARMS

In this paper we estimate systematic risk of the Slovak unquoted agricultural farms – agricultural cooperatives and companies, in the period of 2009-2012. An alternative Markowitz portfolio theory approach was applied. As a measure of the systematic risk, we used return on equity (ROE). Based on the dataset of 996 farms over years 2009-2012, the Slovak farm average ROE reached 0.048% and systematic risk 3%. The Slovak agricultural farms displayed low profitability. The average ROE was higher and systematic risk indicator was lower for agricultural companies than for agricultural production cooperatives. Thus the agricultural companies could be more attractive for investors