Diversification of Farm Liquidity in the EU

Abstract :

The aim of this study is to analyse and evaluate the diversity of liquidity of agricultural holdings in the EU. The financial liquidity of agricultural holdings was examined by time, by EU countries, as well as by economic size of holdings (ESU) and farm type (T8). The studies used statistical data from the EU Farm Accountancy Data Network (FADN).?The average level of current farm liquidity in the EU countries ranged from 4.4 to 6.6, while the average level of fast liquidity from 2.9 to 4.9. Thus, in the light of the normative values, it is a high level of financial liquidity.?The optimum levels of liquidity presented in the literature are not applicable to agricultural holdings. There are very large differences in the level of liquidity of farms between the EU countries. Liquidity is dependent on the economic size of farms - both the current and quick liquidity is lower the higher the economic size of the farm. There is a significant variation in the financial liquidity of agricultural holdings by type of farming.