| Summary: | The purpose of this study is to clarify the influence of subsidies on the efficiency of production in sheep breeding by analyzing the mechanism of functioning based on different types of farms in the southwest region of Bulgaria. Options have been identified that could lead to a positive economic result. Most attention is paid to the profitability of production when farms do not receive or receive subsidies from the state. Small farms (with up to 50 ewes) were strongly dependent on the subsidies for pastures. With
subsidy, the profitability of costs and revenues was higher. In farms with 50 tо 99 ewes subsidies also played an important role for increasing the profitability of operations. In farms with more than 100 ewes, which also received the highest subsidies could not survive only from sales of produce, as in most of
these farms, the profit was negative, e.g. they were at a loss, hence the negative profitability results.
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