Sustainability and Agricultural Investments in Bulgaria: Balancing Profitability and Environmental Protection

Agriculture in Bulgaria faces increasing pressure to balance profitability with environmental sustainability under the evolving framework of the Common Agricultural Policy (CAP) and the European Green Deal. This study analyses the relationship between sustainability-oriented investment support, production cost structure, and farm profitability using farm-level data from the Farm Accountancy Data Network (FADN). The analysis integrates investment-related subsidies, input intensity, productivity indicators, and structural characteristics into an econometric framework to examine their associations with economic performance. Results show that environmental payments, when aligned with efficient management, enhance profitability, whereas conventional investment and rural development support display limited or delayed effects. Higher crop protection expenditure is associated with lower profitability, suggesting cost inefficiencies in chemically intensive production systems. In contrast, fertiliser expenditure shows no significant association, while energy-related spending exhibits a positive but statistically insignificant relationship, likely reflecting mechanisation and technological modernisation effects. Structural factors, particularly farm size and land productivity, remain key determinants of profitability for balancing economic and environmental goals. Overall, the findings suggest that sustainable profitability in Bulgarian agriculture is achievable but unevenly distributed, shaped by structural conditions, managerial capacity, and the design of support instruments. The study offers empirical evidence for aligning sustainable investment incentives with farm-level competitiveness and supports the transition toward integrated economic-environmental monitoring within the forthcoming Farm Sustainability Data Network (FSDN).