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Farm performance, direct payments and EU enlargement

Lookup NU author(s): Professor Matthew Gorton

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Abstract

This article attempts to shed light on the recent performance of farms in the Czech Republic, Hungary and Poland, contrasting it with the situation in two regions of existing EU Member States as a means for stimulating a debate on the likely nature of agricultural restructuring in an enlarged EU. Data were extracted from FADN surveys and performance is measured in terms of three cost-revenue ratios that vary in terms of the valuation of unpaid land and labour input, and direct budgetary transfers. There is no neat divide between established and new EU Member States in terms of the cost-revenue ratios presented; rather the main differences concern the level of capitalisation and wage rates. The analysis indicates that Hungarian farms have the best prospects amongst the analysed CEECs, which is in contrast to the poor returns and structural problems evident in Poland. In the latter case the returns to own labour and land are exceptionally low and the majority of farms persist through a lack of other employment options and a degree of self-exploitation. To deal with this problem, the stimulation of the non-farm rural economy is paramount but the introduction of CAP first pillar support may hinder structural adjustment.


Publication metadata

Author(s): Gorton M, Davidova S

Publication type: Article

Publication status: Published

Journal: EuroChoices

Year: 2004

Volume: 3

Issue: 1

Pages: 32-37

Print publication date: 01/04/2004

ISSN (print): 1478-0917

ISSN (electronic): 1746-692X

Publisher: Wiley-Blackwell

URL: http://dx.doi.org/10.1111/j.1746-692X.2004.tb00008.x

DOI: 10.1111/j.1746-692X.2004.tb00008.x


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