Assessment of economic viability in agriculture

Abstract

Research studies have given little credit to assessment of farm economic viability. Thus, the following scientific problem has been put forward: which methodology is the most appropriate for assessment of farm economic viability? Research findings by the researchers have shown that the concept of farm economic viability is a complex variable, not yet definitive and still fairly difficult to be explained in a single comprehensive way. Therefore, the definition of farm economic viability'has been developedfor the purposes of local research in order to design a methodology for assessment offarm economic viability. Absolute and relative financial or economic indicators are usually used for assessment of farm economic viability. As a result, the indicators characterising economic viability in agriculture have been sampled at the stage of the empirical assessment of farm economic viability. Following identification ofthe indicators and their components, the methodology for assessment of farm economic viability has been designed. The designed methodology has suggested that the mentioned indicators provide comprehensive characteristics of the situation that the farm operates in, i.e. are indicative of the current stage (survival, life, or development) of the farm. Empirical research on the model for assessment of economic viability of farms in Lithuania and EU-27, using the analogical results, has revealed that a majority of farms were viable and in the stage of development. The designed methodology will help farmers estimate the current stage of farm economic viability, as well as the period of their survival, life, and developed under the current condition.