THE LIKELIHOOD OF FARMS BANKRUPTCY: THE CASE OF LITHUANIAN FAMILY FARMS

  • Andrej Jedik Lithuanian Institute of Agrarian Economics, Lithuania
  • Aldona Stalgienė Lithuanian Institute of Agrarian Economics, Lithuania
Keywords: Altman model, likelihood of bankruptcy, economic size, FADN data, family farms, farming type, Lithuania

Abstract

In developing the measures of agriculture policy and purposeful usage of EU funds, also for financial organisations, farmers, advisors and scientists it is important to predict farm bankruptcy. This makes it possible to formulate the scientific problem: what is the likelihood of bankruptcy of different kinds of family farms? The aim of the investigation is to present the likelihood of the Lithuanian family farms bankruptcy based on the economic size and type of farming by analysing financial indicators of farms. Farm-level panel data for the year 2014–2016 from Farm Accountancy Data Network (FADN) was used. The estimated distribution of farm groups based on farm economic size demonstrated that about 40–60% of small farms were in the low likelihood of bankruptcy area. The share of cereals, oilseeds and protein crop farms in the high likelihood of bankruptcy area fluctuated from 13% till 30% during the year 2014–2016. The farm distribution by economic size and type of farming showed that more than 40% of small dairy farms had the high likelihood of bankruptcy in the year 2015–2016, as well as 30% of medium and large cereals, oilseeds and protein crops farms in 2016.

Downloads

Download data is not yet available.
Published
2018-07-24
How to Cite
Jedik, A., & Stalgienė, A. (2018). THE LIKELIHOOD OF FARMS BANKRUPTCY: THE CASE OF LITHUANIAN FAMILY FARMS. Management Theory and Studies for Rural Business and Infrastructure Development, 40(2), 198-205. Retrieved from https://ejournals.vdu.lt/index.php/mtsrbid/article/view/93
Section
Articles