Factors influencing farm profitability in the Republic of Serbia

The paper deals with the production and economic indicators of farms in the Republic of Serbia based on data collected from the FADN sample for 2019. The aim of the research is to analyze and evaluate the influence of important factors on profitability of farms of different economic size. According to their economic size, farms are classified into four groups: very small, small-sized, mid-sized and large-sized farms. Factors influencing profitability are grouped into: production management, financial management, human resources management and subsidies and natural factors. The statistical technique used in the paper is a multiple regression model applied to determine statistically significant influence of certain factors on profitability. The results of the research show that equity turnover is the factor with the greatest positive impact on profitability of farms regardless of their economic size. Paid labour has the greatest negative impact on very small, small-sized and mid-sized farms. Further research should focus on analysis of the financial performance of small and medium farms which, based on the available capacities and income, are the main drivers of development of the entire agricultural sector.