Application of the Gross Margin Method for the Economic Analysis of Agricultural Farms in the Republics of Bulgaria and Macedonia

D. NIKOLOV, T. RADEV

Abstract: The presented article is a part of the authors’ work upon a bilateral Bulgarian-Macedonian project “Market Oriented Management of the Agricultural Farms”. The project is financed by the Ministry of Education and Science. The specific conditions of functioning of the agricultural farms require relevant methods of management. Their correct practical application would facilitate the farmers in taking management decisions. In this sense the Gross Margin Method could be useful. It belongs to the group of the economic methods and has been widely applied in Great Britain during the early 60 years of the past century. The method was promoted as a tool for the needs of the analysis and planning in the agrarian management. The aim of the article is to justify the Gross Margin Method’s utilization as a tool for assessment of the profitability of various agricultural technologies and productions. Object of the analysis are various farms in Bulgaria and Macedonia. The study is based upon a determined number of products, the production of which is widely spread in both countries. Such are the wheat, barley, and milk stock-breeding. For the wheat production analysis is used data from three Bulgarian and four Macedonian farms. For the barley – two farms from each country and for the cattle-breeding – four Bulgarians and five Macedonian farms. As a result of the investigation were made up the following more important conclusions:
• the purchase prices for several products are higher in Macedonia;
• big varieties in the production costs are observed for the studied crops in the different farms;
• the subsidies, granted to the farms have an important contribution for reaching a high valued Gross Margin.

Keywords: agricultural farms; Gross Margin; market-oriented management

Date published: 2024-09-04