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Subsidies Yield Profits But Pig Production Suffers

by 5m Editor
14 March 2008, at 11:06am

CZECH REPUBLIC - Profit in Czech agriculture nearly doubled year-on-year to a preliminary Kc13.7bn in 2007, namely because of EU and national subsidies.

Speaking at this weeks Agricultural Chamber meeting its President Jan Veleba said that Czech farmers received Kc23.5bn worth of subsidies last year and it is the primary reason that many business are showing profitable returns.

According to Prague's Daily Monitor, last year's results reflect a growth in farm gate prices, which have increased faster than input prices after more than 10 years.

The prices of crop production grew by 32.2 percent, although the prices of animal production rose only by 1.6 percent.

"Farm gate pig prices dropped by 7.6 percent and slaughter cattle prices fell 2.3 percent, which led to closures of pig farms," said Veleba.

However, the countries agricultural sector does have problems. The fragmented Czech food industry is hampering development of the production and supply chain and greater integration is needed if the country is to compete in European and world markets.

Czech agriculture has shown profit since the country's entry in the EU in 2004 when farmers' earnings reached Kc8.99bn. Profit amounted to Kc7.6bn in 2005 and Kc7bn in 2006. Before the EU entry, the segment mostly posted losses.

Pork Troubles

Veleba said that sow numbers decreased by nearly a third last year. Starting in October their numbers fall by more than 10,000 a month and if the trend continues, Czech pork production will cover only a half of the country's consumption in a year, Veleba told CTK.

He described the pig breeding situation as extremely serious the reason being a fall in farmers prices by 7.6 percent last year and rising prices of inputs.

Veleba said that the fall in self sufficiency in pork production raises a foreign trade deficit in this area. Last year the deficit stood at Kc6.7bn, a year-on-year rise of some Kc700m.

View the Daily Monitor story by clicking here.

5m Editor