Developing agricultural businesses: management accounting and the FADN System

Zárda, Nóra

Keywords: management information systems, management accounting, agriculture, EU, Farm Accountancy Data Network

In the current economic situation, the demand for creating and maintaining a competitive edge puts increasing pressure on business leaders. They should better manage their costs, plan more accurately and finance projects in a manner which best supports organizational efficiency and development of a good long-term strategy. All this makes it necessary to turn data into valuable information, to improve accountability within the company, to make costs more transparent, and to better support plans and decisions about the future of the company. Consistent use of management accounting can help entrepreneurs reach these goals, and is especially valuable to agricultural businesses due to the special characteristics of the sector. The study looks at the methods, fields and the level of sophistication in using management accounting in Hungarian agricultural businesses, as well as the attitude of business leaders. Second, it looks at experiences, observations and possibilities concerning the FADN system. Third, it explores the connections and correlation between the two systems. The research described in the paper confirmed that using the analyses generated from management accounting and FADN data in business management can make farms more profitable and more effective than their competitors. It was also confirmed that the information generated can effectively support decision-making and management processes. Regarding the application of management accounting in the agricultural sector it is important to mention its ties to the FADN. Research findings indicated that the pieces of information generated by operating and supporting the two systems are interrelated, and that the two systems have a synergistic effect on each other. Experience so far suggests that there are additional fields where using both systems together will be beneficial. These include the development of profitability indicators for farms holdings based on uniform principles, which, among others, could play an important role in allocating subsidies or granting bank loans.

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