Boubdaries in the reproduction process efficiency in the agrarian sector of the Slovak Republic

The objective of the article was to analyze the fixed capital reproduction process in the majority of agrarian company types in the SR, to point at structural fixed capital changes of companies during the transformation period, and to evaluate processes for modernization and utilization. The SR agriculture has been in the process of transformation. Business subjects have slowly been adapted to the market environment, the agro-and-foodstuff market has reached a relative balance, but the decreased demand in agricultural raw materials has been accounted for the lower businesses' performance, and for the lack of resources for the reproduction and modernization of the capital assets. That posed a thread to the growth of the businesses' competitiveness during the EU entry preparation period. The capital assets of the agricultural businesses during the transformation period were hit by many changes, mainly due to production restructuring. The capital structure is slowly getting closer to the production structure and this process has been accompanied by a decreasing value of the tangible investment property, both in the absolute and relati-ve value per land unit/per one worker. Paradoxically we can see that labour productivity in-creased while the fixed capital in companies declined. This is because the adjustment of the capital structure in enterprises to new production structures has not been finished so far. Since in agricultural companies the fixed capital is mainly represented by one-purpose buildings and specialized mechanisms, its re-allocation to new business subjects is rather difficult. Due to that a decrease in the tangible investment property cannot be seen as negative, but also as an economic necessity benefiting for decreasing useless fixed costs. The whole agrarian complex needs resources for modernization and reconstruction of the tangible investment property. At the same time, the depreciation of machines and equipment has still be growing. Non-sufficient own capital and subsidies have remained to be the major resource for financing the fixed capital reconstruction. Agrarian companies have not an easy access to commercial banks' loans, because banks classify them as high risk partners. Our analyses on reproduction processes in agricultural companies are supported by information acquired from Information Lists of a set of companies which were willing to provide them and which are stored in a database of the Ministry of Agriculture of the Slovak Republic maintained by the VTEPP in Bratislava. Economic results for 1998 were provided by 2099 business subjects operating on 81,54 % of the agricultural land in the SR. Therefore these results can be taken as significant. In some cases we have used examples from previous years. Our analyses focused at the most important groups of companies prevailing in the agrarian sector, and we analyzed agricultural co-operatives (AC) and trade companies (TC). Because data for single companies were not available we used average of set of companies sorted by the company type, economic prosperity and the cost level intensity. Supporting the comparability of the sets of companies from the point of view of nature-and-climate conditions, for the purpose of our analyses we selected only companies from maize production region. The objectives of our research were firstly resources for the reproduction of agrarian companies. Currently these are represented by the profit and sales of investment property -being own resources, and investment subsidies and loans as outside resources. In both companies depreciation and credit lines prevailed. Higher volumes of loans are accessible mainly for trade companies. Investment subsidies were more important resource mainly for agricultural co-operatives. The analyses of a set of companies indicated that economically prosperous companies have followed the strategy of production intensification, restructuring and reconstruction of their tangible investment property. Regarding their resources for financing the fixed capital reproduction they are more strongly supported also by the agrarian policy mainly by allocation of investment subsidies. Nonprofitable companies received much less subsidies for investment. Subsidies to support investment process have been directed mainly to profitable companies, however, large volumes of funds have flown also to companies which are not able to make use of them efficiently. Therefore it is still necessary to seek better forms for fund support allocation based on efficiency criteria. Business subject in agriculture still suffer a lack of funds for reproduction of their property tied up with a low liquidity, difficulty to obtain credit lines, growing prices of purchased production equipment and machines, but also with the stagnating production effects. Trade companies, however, have bigger volumes of funds at their disposal to compare agricultural cooperative, and therefore have achieved a higher reproduction rate. Further on, the analyses focused on the effects of the reproduction process. We used the following indicators for the evaluation: labour productivity in revenues and in value added per capita, and revenues per one crown (Sk) of the investment property. The results have indicated that an increase in the cost intensity is closely tied to land workers' equipment by the fixed capital. That means the operational intensity is linked to the capital intensity. There are only small differences between profitable and nonprofitable cooperative regarding their land and workers' equipment by the tangible investment property. And small differences have been recorded also in the labour productivity measured by revenues per one worker. However, much bigger are differences between them regarding labour productivity expressed by value added per one worker, and regarding revenues per one crown (Sk) of the tangible investment property. Profitable companies not only achieved a lower intermediate consumption per revenues unit, but they could also better use their fixed capital. Similar results were recorded also in the set of trade companies. However, the revenue productivity here less correlates with the cost intensity. A different situation was indicated regarding the value added where profitable companies considerably exceeded the productivity level in non-profitable companies. The analyses of fixed capital reproduction in the agrarian sector allows the following: the reconstruction and modernization of the investment property is not sufficient and this is mainly due to nonsufficient funds, the reason of a low efficiency of the tangible investment property is its high depreciation, especially regarding machines and equipment, nonadequate structure and excessive dimensions of some elements, the second cause of a low efficiency of the fixed capital is also stagnation of production effects, without credit lines and supportive resources the reconstruction and modernization of the tangible investment property is not feasible. These funds should be preferentially distribute only through loans' bonuses or repayments to commercial banks which are able to assess the risk and the return on investment plans of business subjects