Comparative study of the agricultural performance of groups of EU member states

Beke, Judit – Forgács, Anna – Tarján, Tamás

Keywords: agricultural performance, output, Eastern Europe

Our paper examines whether data from the last 10 years confirm that Eastern European countries were unable to perform in line with their potentials only due to their weak capitalisation. We selected 6 Western and 6 Eastern countries from among the EU member states and examined the performance of these two groups.
It was found that the output level of the countries of the Eastern regions followed their line of potential, while the performance of the six Western countries was appreciably lower than their own potential. (The high figure calculated for the Netherlands can be considered a unique result.)
Comparison of the actual output to the potential output calculated on the basis of the linear model fitted to the Western countries, the figure calculated for the Eastern countries is on average less than 40%. Romania, Poland and Slovenia are at one third; Hungary and Slovakia are a little over 40%, and the Czech Republic is at 62%. In line with the conclusion of the FAO and EBRD, this supports the assumption that for example the Polish, the Romanian and the Slovenian could achieve a much higher value - as much as triple - through improves capitalisation (primarily through the acquisition of machinery, the introduction of advanced technologies and the necessary expertise).
In agreement with Harvey, it can also be concluded that the Community grants are incoherent and illegitimate. No matter how we examined the distribution of CAP monies, whether in terms of the countries’ share of output, per capita GDP, or per hectare, the Eastern countries and the Netherlands receive the least subsidies, while Austria, Denmark and France receive a larger share of the subsidies even though their performance does not justify it. In other words, despite the large amounts of subsidies, the strongly subsidized Western countries were unable to achieve outstanding results compared to the others, while a higher share of the Community funds could greatly help the newly joined countries live up to their hidden potential.

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