Justification of the minimum required rate of return on equity in dairy cattle farms

Ts. Harizanova, V. Gaidarska, P. Stoikov

Abstract: Cattle breeding is a strategically important sector for each country. In Bulgaria there is a tendency towards a gradual concentration of productive herds, reducing number of farm with up to 10 cows at the expense of larger ones. The majority of farms from third category determines the low productivity of the sector and uncompetitiveness of the production. The aim of this study was to justify the minimum required rate of return on equity in dairy cattle farms by category in Bulgaria for 2011. Projects for modernization and reconstruction suggest a lower risk but lower return on investment. Projects for adoption of modern technologies are riskier, but also imply a higher return, higher labor productivity, higher quality and quantity of milk. They create conditions for: improving working environment, concentration of herds, animal welfare, better environment protection and prerequisites for realization of genetic potential of animals.

Keywords: cattle breeding; investments; rate of return; risk

Date published: 2018-02-21