Exploring the Role of EU Subsidies in Enhancing the Competitiveness of Slovak Farms

The discourse surrounding the determinants of agricultural competitiveness is extensively examined at both the farm and sectoral tiers within the European Union. The competitiveness of Slovak farms is currently strongly influenced not only by internal factors such as productivity, innovation, and management, but also by external factors, especially political and economic decisions at the EU level. Financial support from the EU plays a key role in enhancing the competitiveness of Slovak farms. Therefore, we examined the impact of subsidies, i.e., financial support, on the competitive position of farms in Slovakia in a broader context. The aim was to determine how these subsidies influence cost-effectiveness, productivity, and the ability of farms to compete in the market. Based on the conducted research, we can conclude that EU subsidies have a significant impact on the competitiveness of agricultural enterprises in Slovakia. A statistically significant correlation was confirmed between farm competitiveness and receiving financial support through subsidies, which was evident in all observed years, except for 2013. Statistically significant differences in competitiveness were also confirmed between enterprises that receive subsidies and those that do not. Based on the results, it has been confirmed that subsidies support the income side of farms and improve the overall cost-to-revenue ratio, which is reflected in better cost efficiency. These subsidies contribute to increasing the competitiveness of agricultural enterprises by allowing farms to better cover their costs, which can have a positive impact on their ability to compete in the market in both the short term and long term.