Development of productivity and its components in Slovak agriculture before and after EU accession: Analysis of the impact of CAP introduction on the performance indicators of Slovak crop and livestock farms

The common agricultural policy affects a broad range of issues on farms. Their productivity is no exception and CAP can affect it with different intensities and in different directions. CAP was introduced in the Slovak Republic after its accession to the EU in 2004. From that moment there was a significant increase in number of farms receiving subsidies. The aim of this paper was therefore to analyze the impact of these changes on the development of productivity and its components on the Slovak farms. The research consisted of two stages. The first stage we got a detailed picture of the evolving nature of the performance of Slovak crop and livestock farms in the period 2000-2012 by applying two approaches to evaluation of change in total factor productivity and its components, namely Malmquist Productivity Indices and Luenberger Productivity Indicators. We found that on average both types of farms increased their total factor productivity during the specified period. The driving force behind this development was the technological progress, the slowing factor was deterioration of technical efficiency of farms. By way of further decomposition of Malmquist indices we have also revealed Hicks-non-neutral technical change in the character of Slovak agriculture since the industry increasingly opted for automation and mechanization of production and mitigated use of the workforce. In the second stage we applied Random Effect Models for analyzing panel data to examine the effects of accession to the EU on the development of performance indicators of Slovak farms and input bias of technical change. We found that dependence on farm subsidy policy was significantly higher after joining the Union, while total factor productivity after 2004 developed worse for both types of farms. The effect of changes in the share of total subsidies received on total farm income was the net effect of investment induced productivity growth and the negative effect of efficiency loss. The first prevailed in the case of crop and the second one in the case of livestock farms.

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Conference Paper/ Presentation
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JEL Codes:
C23; C25; C44; Q18

 Record created 2017-04-01, last modified 2018-01-23

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