Selected problems of sugar beet growing in Slovakia Roman Récky 1, Jarmila Horváthová 2 Slovak University of Agriculture in Nitra 1,2 Faculty of Economics and Management, Department of Marketing and Trade 1, Department of Languages 2 Trieda Andreja Hlinku 2 Nitra, Slovak Republic e-mail 1, 2 : roman.recky@uniag.sk., jarmila.horvathova@uniag.sk Abstract Sugar beet is a technical crop of the temperate zone which is predominantly used for the sugar production in our country. In industry it is also utilized for the production of bioethanol and molasses. The use of this crop is significant in pharmacy and forage growing, too. At our territory sugar beet rangs among the cultural crops with the long-time growing tradition and the subsequent processing in the sugar industry. Since the accession of the Slovak Republic into the EU the sugar-making industry in Slovakia has been influenced significantly by the regulations of the Common Organization of Sugar Market which regulates the quantity of produced sugar by the system of the assigned domestic quotas. Recently a slight increase of sugar beet harvesting area as well as sugar beet production has been recorded, however, sugar production has fluctuated. in the sugarbeet season 2013/2014. 190 growers grew sugar beet with the average saccharinity of 16.80 %. Sugar beet was processed in two sugar refineries - Považský cukor, Plc. in Trenčianska Teplá and Slovenské cukrovary, Ltd. in Sereď with the processing capacity of more than 10, 000 tonnes of sugar beet per day. Both sugar refineries produced totally 172, 568 tonnes of sugar and they exceeded the production quota by 60, 248.5 tonnes (53.6 %). Our paper deals with the evaluation of the selected economic and marketing indicators of sugar beet growing in 2008 2014. Key Words: Costs, Harvesting Area, Production, Producer Price, Rentability, Sugar Beet. JEL Classification: Q 11, Q12, Q13 1. Introducion The history of the sugar production goes back to the beginning of our era. At that time sugar was produced from the sugar cane grown in the rain primaeval forests in New Guinea. However, India was the important grower of this cultural grass. The cultivation of sugar cane was expanded from this country into the warm areas of the whole world. Nowadays, sugar cane is grown in approximately 80 countries of the world and they produce from it almost 80% of the world production of sugar (115 mil. tonnes per year). The raw material for the rest of the world sugar production is sugar beet. The beginning of the sugar beet cultivation in Europe is related to the early 19 century. At that time, in particular in 1802, the first sugar refinery in the world was founded in Wiňsk in the Lower Silesia. Sugar beet as a cultural crop is the only material for the sugar production in our country. At our territory the sugar beet cultivation started in the northern parts of Slovakia at the beginning of 19 century. In the middle of 19 century the cultivation was moved to the territory of the south-west of Slovakia where sugar beet is grown until now. The first sugar refinery at the territory of Slovakia in the Austro-Hungarian monarchy was based by Mikuláš Lačný in Veľké Úľany in 1828. Since then 34 sugar refineries have been operated at our territory. After 1990 sugar beet growing has been declined and the reforms in sugar industry resulted in termination of eight Slovak sugar refineries. 703
Nowadays, the regulations of the Common Organization of Sugar Market have the significant impact on the sugar production in Slovakia and other EU countries. This organization has regulated the sugar regime in the EU countries without any considerable changes since 1968. The termination of the common organization of the sugar market is planned in 2017. One of the principal tools of the Common Organization of Sugar Market are the production quotas for the sugar production and they influence directly also the sugar beet production. In Slovakia sugar beet ranks among the crops with the highest amount of the direct payments per the unit of area. In 2014 this payment achieved 803.53.ha -1, out of it the special payment for sugar was 597.96.ha -1 and the flat payment per area 205.57.ha -1. In the economic year 2013/2014 there 190 growers grew sugar beet at the area of 22, 212 hectares. They produced totally 1,148,000 tonnes of sugar beet of the average saccharinity 16.80 %. 2. Data and methods The objective of the paper is the development evaluation of harvesting areas, yields, saccharinity, costs and production of sugar beet. Furthermore, we analyzed the subsidies provided to sugar beet growers in particular years, exercise prices, earnings and revenues. The economic results and the cost effectiveness and rentability with subsidies and without them was calculated by the given indexes. We concentrated our attention on the selected aggregate of companies in Slovakia, monitored and registered by the database bank of the National Agricultural and Food Centre and the Research Institute of Agricultural and Food Economics in Bratislava during the period of 2008 2014. In the paper the methods of analysis, synthesis, comparison and simple mathematical and statistical methods have been used. The relevant data have been acquired from the Statistical Office of SR, from the Situation and Prospective Report of the Research Institute of Agricultural and Food Econonics, the National Agricultural and Food Centre of the Ministry of Agriculture and Rural Development of SR and from the publications Expensiveness of Agricultural Products in SR 2008 2014. 3. Results and discussion Sugar beet growing in Slovakia has had more than 200-year tradition in connection with the sugar-making industry. During the recent 30 years the lowest harvest areas of sugar beet (11, 118 hectares) were recorded in 2008. In the 80-th of the last century the harvest areas were at the level more than 50,000 hectares. Since then the harvest areas had been decreased continuously and they fell to the lowest level in 2008. From that year we have monitored the yearly growth of the harvest areas with the highest level in 2014 (22, 212 hectares). In comparison with 2008 2014 this growth is twofold. The development of the harvest areas of sugar beet in 2008 2014 is given in the Table 1. 704
Tab.1 Development of harvest areas of sugar beet Indicator MJ 2008 2009 2010 2011 2012 2013 2014 Index 14/09 Harvest areas ha 11.118 15. 952 17.932 18. 096 19.741 20.333 22.212 2.00 Source: Statistical Office and own calculations In the Table 2 there the development of yields per hectare, saccharinity and sugar beet production in Slovakia in 2008 2014 is recorded. The yields per hectare and saccharinity have the significant impact on the economic effectiveness of sugar beet growing. The Slovak growers achieved the highest average yields per hectare of sugar beet in 2014 (69.79 t.ha -1 ), the lowest ones in 2012 (45.31 t.ha -1 ). Sugar beet of the standard quality must have the saccharinity at the level of 16%. The saccharinity is the essential qualitative sugar beet requirement and it is associated with the minimal price of the quota sugar beet (26.29.t -1 ). The average saccharinity lower than 16 % was recorded in 2010 and 2014. The production depends in the harvest areas and yields per hectare. The highest production (1, 550,200 t), was registered in 2014. In 2008 2014 we recorded the growth of sugar beet production by 872,000 tonnes. Tab. 2 Development of yields, saccharinity and sugar beet production Indicator MJ 2008 2009 2010 2011 2012 2013 2014 Index 14/09 Yield t.ha -1 61.07 56.00 54.52 64.14 45.31 56.29 69.79 1.14 Saccharinity % 16.21 16.60 15.44 18.03 16.50 16.80 15.40 0.95 Production thousa nds of tonnes 678.2 898.8 978.7 1 160.7 894.5 1 144.6 1 550.2 2.29 Source: Research Institute of Agricultural and Food Economics and own calculations Apart from the saccharinity and yields per hectare, which are given in the Table 2, the costs, subsidies and exercise prices have the significant impact on the effectiveness of sugar beet growing. The development of the costs, exercise prices, subsidies, revenues, earnings and the economic results without subsidies and with subsidies achieved in sugar beet growing in 2008 2014 are given in the Table 3. The costs per hectare proved to be rather balanced values and they are falling slightly per tonne. Similarly, the level of the exercise price is stable. The subsidies provided to the sugar beet growers are the sum of the flat payment per area and the special payment for sugar. The highest subventions (803,35.ha -1 ) were recorded in 2014 and the lowest ones (416,33.ha -1 ) in 2010. Totally, within the evaluated period they were increased by 14%. In the revenue index the subsidies are not included and the earning are calculated as the revenues and subsidies. The highest revenues and earnings (2 587.1.ha -1 or 3 390.5.ha -1 ) were recorded in 2014, the lowest ones (1 662.9.ha -1 ) in 2012, the revenues in 2010 achieved 2 399,2.ha -1. We have calculated the economic result per hectare with subsidies and without them by these indicators. The average economic result was positive in all the studied years, apart from the exception of 2012. In that year the sugar beet growing was unprofitable without subsidies (-381,8.ha -1 ). 705
Tab. 3 Development of costs, exercise prices and subsidies of sugar beet Indicator MJ 2008 2009 2010 2011 2012 2013 2014 Index 14/09 Costs.ha -1 1 948.8 1 833.5 1 908.9 2 024.8 2 044.7 1 948.7 1 942.4 1.00 Costs.t -1 29.3 29.6 29.6 29.6 43.6 33.2 25.3 0.86 EP.t -1 37.61 41.95 36.37 36.13 36.70 40.09 37.07 0.99 Subsidies.ha -1 703.73 700.29 416.33 752.83 771.42 782.95 803.35 1.14 Earnings.ha -1 2 296.8 2 349.2 1 982.9 2 317.4 1 662.9 2 256.7 2 587.1 1.13 Revenues.ha -1 3 000.6 3 049.5 2 399.2 3 070.2 2 434.3 3 039.6 3 390.5 1.13 VH 1.ha -1 348.0 515.7 74.0 292.6-381.8 308.0 644.7 1.85 VH 2.ha -1 1 051.8 1 216.0 490.3 1 045.4 389.6 1 090.9 1 448.1 1.38 Source: Statistical Office, Research Institute of Agricultural and Food Economics and own calculations Note: 1 without subsidies, 2 with subsidies Tab.4 Development of rentability and effectiveness of sugar beet production Indicator 2008 2009 2010 2011 2012 2013 2014 Cost effectiveness 1 1.18 1.28 1.04 1.14 0.81 1.16 1.33 Cost rentability 1 0.18 0.28 0.04 0.14-0.19 0.16 0.33 Cost effectiveness 2 1.54 1.66 1.26 1.52 1.19 1.56 1.75 Cost rentability 2 0.54 0.66 0.26 0.52 0.19 0.56 0.75 Source: own calculations by using data from Table 3 Note: 1 without subsidies, 2 with subsidies In the Table 4 the development of rentability and effectiveness of sugar beet production costs are given. As it is evident from the table, we can rank sugar beet among the crops which are grown with a high rate of rentability. Sugar beet cultivation in Slovakia was profitable in 2008 2014. The highest revenues per 1 investment (without subsidies) were achieved in 2014 (1.33 ) and in 2009 (1.28 ). We registred the negative rentability only in 2012 (-0.19 ). Sugar beet growing with subsidies is highly profitable. The highest rentability was recorded in 2014 (0.75) and in 2009 (0.66). In the Figure 1 the development of refined sugar consumption in kilograms per capita and one year is recorded, including the products containing sugar, in the period of 2008 2014. During the studied period the sugar consumption per capita fell by 4.5 kg. year -1 (13 %). The highest consumption was monitored in 2008 (34.5 kg.year -1 ) and the lowest one in 2012 (29.5 kg.year -1 ). The recommended consumption of refined sugar per capita, including sugar products, in accordance with the basic model of the recommended doses of food is at the level of 30.9 kg.year -1. A higher consumption was registered in 2008 2011 and 2013. In 2012 and 2014 the real sugar consumption was lower than the recommended one (29.5 kg.year -1, resp. 30.0 kg.year -1 ). 706
Figure 1: Development of refined sugar consumption per capita (kg.year -1 ) 35 34 33 34,5 33,4 34,3 kg 32 31 31,3 31,1 30 29 28 29,5 30,0 27 2008 2009 2010 2011 2012 2013 2014 years Source: Authors according to the data of SO SR The development of the annual consumer prices of the granulated sugar in 2008 2014 is given in the Figure 2. In 2008 the average price was 0.96.kg -1. From 2008 to 2010 the consumer prices of sugar were decreased (decline by 0.17.kg -1 ) and after 2010, i. e. in 2011 and 2012 the prices reached the level of 1.14.kg -1. From 2012 we have monitored again the decline of the consumer prices of sugar. In 2013 year-on-year decrease was achieved by 0.05.kg -1. In 2013 and 2014 this decline was represented by 0.18.kg -1. In this year the average consumer price of sugar is 0.91.kg -1. During the monitored period 2008-2014 the total decrease was 0.05.kg -1 (5,2 %). Figure 2: Development of average consumer prices of granulated sugar (.kg -1 ) 1,2 1 0,8 0,96 0,87 0,79 1,07 1,14 1,09 0,91 price 0,6 0,4 0,2 0 2008 2009 2010 2011 2012 2013 2014 years Source: Authors according to the data of SO SR 707
4. Conclusion Sugar beet is a traditional crop cultivated in Slovakia. In our country it is the only raw material suitable for sugar production. In the EU countries sugar beet growing is influenced by the Common Organization of Sugar Market, which specifies the production quota for sugar and isoglucose to the particular countries in every economic year. For the economic year 2013/2014 the sugar quota for the Slovak Republic was at the level of 112, 319.5 tonnes. The Agricultural Paying Agency divided the quota for the company Považský cukor, Plc. 68, 478.5 tonnes and for the company Slovenské cukrovary, Ltd. - 43 841,0 tonnes. Both sugar refineries produced totally 172, 568.0 tonne of sugar, i.e. they exceeded the quota by 60, 248.5 tonnes. In our paper we are evaluating the selected economic and marketing indicators of sugar beet growing and sugar production in 2008 2014. In that period the harvesting areas of sugar beet were doubled and in 2014 they achieved the level of 22, 212 ha. The average yields per hectare grew by 14%. The growth of harvesting areas and yields resulted in the sugar production growth by 872,000 tonnes, which means the production increase by 229%. The required saccharinity 16% and more was not achieved in 2010 and 2014. Sugar beet seems to be the crop of high rate of rentability. Apart from the costs and exercise prices the economy of sugar beet growing is influenced significantly by the subsidies provided to growers. Besides the unified payment per area, they are also given the special payment for sugar. Totally these two payments meant the subvention of 803.35.ha -1 in 2014. This is also the reason why sugar beet growing is attractive economically and profitable in all the evaluated years with the highest profit achieved in 2014 (1 448.1.ha -1 ). In conclusion, the development of the refined sugar consumption per capita is given in a graph, including the sugar products, and also the development of the granulated sugar prices. Both graphs show the decreasing tendency. In 2008 2014 the refined sugar consumption fall by 13% and the consumer prices of granulated sugar were recorded as the decline by 5.2%. Based on the evaluated aspects and results we can state that sugar beet growing in Slovakia is an important activity and for the growers it is economically interesting sector of the plant production with the high rentability. References [1] Meravá, E.: Cukrová repa, cukor, Situačná a výhľadová správa k 30.9.2014. Bratislava : MPRV SR, NPPC, VÚEPP Bratislava, máj 2015, 37 s., ISSN 1338-7243. [2] Nákládovosť poľnohospodárskych výrobkov v SR za roky 2012-2014. Bratislava: VÚEPP, MPRV SR, NPPC, 2013 2015, 64 s., ISBN 978-80-8058-605-8. [3] Récky, R.: Vývoj zberových plôch, úrodnosti a nákladov v SR. In: Zborník príspevkov z medzinárodnej vedeckej konferencie Medzinárodné vedecké dni 2006, Nitra, SPU 2006, s.561-564. ISBN : 80-8069- 704-3. [4] Récky, R., Dobák, D., Rovný P.: The evaluation of the marketing level of sugar beet production and consumption in the production-economical conditions in Slovakia. In. Global Economy 2010. Book of abstracts of scientific papers. Nitra, SPU, 162 s. ISBN 978-80-552-0386-7. * Online full-text paper availability: doi:http://dx.doi.org/10.15414/isd2016.s8.18 708
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