The profitability of settlements specialising in sheep-farming

Vincze, Judit – Tenk, Antal – Németh, Anett – Falusi, Bálint

Keywords: factors influencing profitability, production value, production cost, sector achievement, the effects of subsidies on income

The settlements examined were loss-making in three of the years between 2001 and 2005 (2001, 2004, 2005). Following accession in 2004, grass-based animal husbandry sectors enjoyed significant subsidies from the EU. This is particularly relevant in such disadvantaged areas as the North Hungary region. In domestic sheep-farming there are two options available for reducing expenditure and thereby reducing costs: utilisation of grazing lands and the reduction of veterinary costs. At the same time, the quality of the environment and the standard of feeding could be improved. One of the possibilities for increasing turnover is to increase prices, but this is independent of the farmer’s decision-making remit and his influence on it is negligible. However, another possibility for increasing turnover is to increase yield, while a third is to maximise utilisation of subsidies. It can be determined based on the calculation method that, taking into account income calculated with the various forms of subsidy available, the sector could be profitable. On the settlements examined, the subsidy per ewe would increase profit by 4,103 forints, while the subsidy per hectare would increase it by 5,802 forints.