Economic Profit of Family Farms in the Republic of Serbia

The paper aims to assess and evaluate the achieved level of economic profit of different types of farming in the Republic of Serbia. The research focuses on Family farms that were part of the FADN sample in 2022. Economic profit, unlike entrepreneurial income, accounts for the opportunity costs of factors of production (labor, capital, and land) in its calculation, making it a highly suitable indicator of the business success of family farms. The research results indicate that more intensive farms, which also had the highest asset turnover ratios, achieved the highest economic profit. It refers to farms engaged in horticulture and granivores farms. On the contrary, farms engaged in livestock production, such as grazing livestock and milk production, experienced very low economic profits or even economic losses. It primarily concerns small farms with a standard output value below 25,000 euros, mostly located in the areas with natural constraints in Central Serbia. For this reason, agricultural policymakers should focus on economically empowering by encouraging associations, adopting a more restrictive approach to agricultural product imports, ensuring timely payment of government support, and implementing other similar measures.