Economic and Financial Sustainability Dependency on Subsidies: The Case of Goat Farms in Greece

Abstract

Goat farming is an important production sector not only for Greece, but also for other Mediterranean countries, as it contributes to the family economy in rural areas. Despite the importance of goat farming, this sector has experienced economic difficulties due to poor management and increased production costs. The aim of our research is to determine goat farm profitability by surveying goat farmers for revenues, variable costs, and fixed costs of their farms. With the use of Principal Component Analysis, all economic factors contributing to overall production costs are examined, as well as their specific impacts on cost formulation. According to our results, goat farms in Greece are not profitable and they cannot survive without government subsidies. Farm economics and agricultural policies could be leveraged to improve community and environmental outcomes in order for farms to be economically and financially sustainable.