Sources of financing for investments in agricultural holdings in Bulgaria – assessment of financial instruments

Damyan Kirechev
University of Economics – Varna, Department of Agricultural Economics, 9002 Knyaz Boris I 77, Varna, Bulgaria

Abstract

Kirechev, D. (2023). Sources of financing for investments in agricultural holdings in Bulgaria – assessment of financial instruments. Bulg. J. Agric. Sci., 29 (Supplement 1), 49–63

The aim of the study is to assess the sources of investment finance (including land and fixed assets) that farms use most frequently. FADN data for the first two programming periods after Bulgaria’s accession to the EU were used for the assessment. The analysis is based on variations in the value of farm assets and changes in capital sources for financing investments. The assessment is for farms in Bulgaria by type and by economic size. It is shown that, in most cases, farms use their own capital to finance their investments, with external financing mainly coming from subsidies and to a lesser extent from bank loans. The lower external financing may be due to financial management difficulties and insufficient use of financial leverage. This adds to the need for policy interventions to facilitate the relationship between farmers and lenders.

Keywords: agricultural investment; financing of agriculture; financial performance; source of funding; FADN

See the article as a PDF.