Investigation of the competitiveness of Hungarian agricultural products

Bozsik, Norbert

Competitiveness is a complex category since it is influenced by numerous factors, sometimes to a very different degree. In short, competitiveness means standing one’s ground in competition. When judging the competitiveness of a person his position as compared with that of his competitors can be valued. Competitiveness can be studied on national, sectorial, and company level, as well as in terms of products or services. Needless to say, international competitiveness means the extent to which a country is capable of standing its ground in world-wide competition making use of its available resources and goods. As for Hungary, she will become member of the European Union in 2004, wherefore market competition, more severe protection of the consumers’ interests, food safety, technological discipline, and quality issues will come to the front. Due to the expansion of the market, it can be expected that the efficiency of national resources available for agriculture will improve after the entry of the country into the European Union. According to the classical theory the comparative advantages of each country are based on its relative production costs. However, at present state intervention is important as well, especially in the form of subsidies, and backed by exchange rate policy. For the purposes of an exact analysis indices can be calculated in order to reveal protectionism and determine competitiveness. It is still the theory of comparative advantages that constitutes the theoretical basis of the Investigation of competitiveness but at present this issue requires already a much more complex approach; e. g., the competitiveness of prices can be measured, or evaluation can be carried out using different indices. The so-called Grubel-Lloyd index is used for measuring trade within a sector, and the RCA index indicates comparative advantages showing up. When valuating competitiveness it is important to compare different indices in order draw unambiguous and correct conclusions. Results of Investigations carried out by the authors have indicated that several products of Hungary are competitive on EU markets, e. g. livestock, meat products, cereals, fruits & vegetables, honey, and spirits. Unfortunately, competitiveness is lacking in case of some products, e. g. tobacco, animal and vegetable fats, and it is not unambiguous in case of some other products, e. g. milk, dairy products, eggs, and sugar. Several strategic developments are required for increasing the competitiveness of Hungarian agricultural products, such as: investments into technologies and environmental protection, and the support of companies in respect of coming onto the market. Farmers have to be supported by means of private storage, as well as offering them export guarantees and export credits. Such measures as the establishment of producing and selling cooperatives, and the support of effective marketing activities (e. g. by means of designation of origin, improvement of packaging, etc.) may further add to the competitiveness of Hungarian agricultural products.

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