Title: Czech Farmers Face Significant Losses Due to Low Crop Prices
Subtitle: Agricultural Associations Criticize Government’s Insufficient Support
Date: November 2, 2023
According to experts, Czech farmers are expected to suffer significant losses this year, primarily due to low purchase prices for grains, rapeseed, and milk. It is estimated that the agricultural sector will experience a downturn of approximately 36 billion Czech koruna.
The difference between entrepreneurial income and agricultural profit is a key concern highlighted by Martin Pcha, the Chairman of the Agricultural Union. He points out that the main distinction lies in the fact that business entities do not report their wages as expenses but rather include them in their income, which affects their overall profit.
This year, grain prices have dropped by 50 percent, as stated by agricultural economist Doleal. Instead of selling at eight thousand koruna per ton, farmers are now receiving only four thousand and 3,500 koruna per ton. Consequently, the grain sector is expected to suffer a loss of around 24 billion koruna. Similarly, rapeseed prices have decreased by five thousand koruna per ton, resulting in a loss of five billion koruna. Further losses are anticipated due to low purchase prices for milk.
Regarding last year’s entrepreneurial income, it amounted to approximately 850 thousand koruna per entity, enabling each farmer to purchase two hectares of land. Calculated per hectare, the average profit was 5,000 koruna, according to Pcha.
In addition to the challenges faced by farmers, Czech agriculture is currently in a crisis due to the surplus of goods on the European market. Many farmers criticize the government’s introduction of redistributive payments, which provide subsidies of 3,536 koruna per hectare for the first 150 hectares. Conversely, basic payments per hectare have significantly decreased to 1,760 koruna for all farms. Pcha argues that this payment is the lowest in the entire European Union. Comparatively, neighboring countries receive higher basic payments, with Austria often cited as an example, receiving 208 euros per hectare (approximately three times more than the Czech Republic’s 72 euros per hectare).
Jaroslav ebek, the Chairman of the Association of Private Agriculture, criticizes the government for failing to fulfill its promises and implementing insufficiently progressive changes that primarily benefit small-scale farmers. He believes that very little has been done in line with the majority of pre-election commitments.
Former Prime Minister Petr Fiala (ODS) also criticized agricultural profits, particularly those of the Agrofert conglomerate, which includes the iDNES.cz website. The conglomerate was transferred to a Swedish fund by former Prime Minister Andrej Babi (ANO). Agrofert reported a profit of nearly 13 billion koruna last year, representing a 124 percent increase, with group revenues rising by 33 percent to 245 billion koruna.
In conclusion, Czech farmers are facing significant financial challenges due to low crop prices, while agricultural associations criticize the government for inadequate support. The agricultural sector is in a crisis, and urgent measures are needed to alleviate the situation and ensure the sustainability of Czech agriculture.
What measures should the government implement to provide adequate support and assistance to farmers in coping with low crop prices?
Age income was approximately 425 thousand koruna. In contrast, the average agricultural profit was only 210 thousand koruna per hectare.
The lack of government support has drawn criticism from agricultural associations. According to the Chairman of the Agricultural Union, farmers are not receiving adequate assistance from the government to cope with low crop prices. The associations argue that the government should implement measures to stabilize and support the agricultural sector, such as providing subsidies or implementing price floors.
The agricultural sector is a vital part of the Czech economy, employing a significant portion of the population and contributing to the country’s food security. The current situation has raised concerns about the future viability of farming in the country and the potential long-term impact on food production.
In conclusion, Czech farmers are facing substantial losses this year due to low crop prices, particularly for grains, rapeseed, and milk. The discrepancy between entrepreneurial income and agricultural profit is a major issue, highlighting the challenges farmers face in maintaining profitability. Agricultural associations criticize the government for not providing sufficient support to mitigate these losses. The situation calls for urgent action to safeguard the agricultural sector and ensure the long-term sustainability of farming in the Czech Republic.
It’s disheartening to see the struggle faced by Czech farmers, as low crop prices and decreased profits not only impact their livelihoods but also the overall agricultural sector. Investing in sustainable farming practices and exploring alternative markets could be potential solutions to overcome these challenges.