Evaluating the Financial Position and Performance of a typical Dairy Farm in Bulgaria

The aim of this paper is to explore the potentials of typical middle sized dairy farms (with 22 cows) to absorb the quotas and market shares released by the small scale farms after the EU accession in 2007. The hypothesis is that quota introduction combined with high quality standards for raw milk will significantly reduce the share of small scale farms in milk production for processing. If different opportunities for alternative income-generating activities become available for small farms (as a consequence of the EU accession), their willingness to give up dairy farming will increase. Middle sized farms will benefit from an improved access to resources and also from more favourable conditions for economic growth. In this paper the analysis was made on the International Farm Comparison Network (IFCN) concept of typical farm. The Trade Implication and Policy Implication CALculator (TIPICAL) modelling program provides financial statements and most of the calculations for business’ profitability, solvency, liquidity, cost analysis and comparisons. The results of the financial analysis show the poor credit power of farms, when calculated only on farm assets market price. In the same time, it reveals the potential of growing and carries out an economy of scale when both financial and farm management are improved.