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Abstract
Changes in the political, economic and legal framework after reunification led
to major structural changes in East German agriculture. Altered factor and
product price relations, abolition of traditional channels of distribution and
problems with liquidity forced existing farms to adjust their organization and
factor input, to increase productivity and to seek technical progress. Although
the number of agricultural enterprises has grown continually as a result of the
appearance of new and re-established farms, the number of people engaged in
agriculture has fallen dramatically. In Brandenburg - the federal state surrounding
Berlin - 31 per cent of those employed in agriculture in 1990 were
forced into early retirement, and another 20 per cent took part in further
education, retraining or employment creation schemes (MELF, 1997). Many of
those workers who had been engaged in employment creation schemes became
unemployed after completion. Even from 1992 to 1997, the· workforce in
agriculture decreased from 39 055 to 25 991 working units (WU).
The paper attempts to study the factors that have determined the employment
decisions of farm operators and how they adjusted employment over time
with particular regard to legal forms and production structures. This is achieved
by applying a data envelopment analysis to a sample of 89 farms, existing over
the period 1992/93 to 1995/96. The article is structured as follows. After
presenting the theoretical background of labour deployment in enterprises
undergoing transition, some hypotheses are developed as a guideline for the
empirical investigation. The next section describes the method and the data
which are utilized and that is followed by presentation and discussion of the
empirical results.