The role of productivity growth in agricultural production development in the central and eastern Europe countries after 1991

Abstract

The land resources available for agriculture are limited.The global population is growing constantly, and so is demand for food.Increase in agricultural production can be achieved either through intensification of production or through technological progress.In the recent decades, increase in global agricultural production has been achieved mainly thanks to increase in effectiveness of production factors.The objective of this study is to compare changes in agricultural production in the selected new Member States of the EU after year 1991 and to determine the significance of TFP in production increase.The analysed period encompassed years 1991-2014; source data published by USDA were used.It was found that after the systemic transformation, a significant decrease in agricultural production -even to 40 % -was recorded.This was due to reduction of the area of farming land, limiting of use of production factors and their reduced productivity.In the following years, agricultural production in the countries examined increased notwithstanding further limitation of inputs.This was due to gradual increase in factor productivity.In the examined period, increase in TFP almost entirely balanced off the decrease in production inputs and limitation of production area.In 2014, compared to 1991, inputs in some countries decreased even by 50 %, while production was reduced by no more than 30 %.The strongest increase in factor productivity was achieved in Latvia (38 %), Poland (26 %) and Estonia (24 %); nevertheless, in all of the countries analysed except for Poland, increase in production was due only to increase in TFP.In Poland, this process was accompanied also by intensification of production.Increase in production factor productivity is the key variable that generates increase in agricultural production, also under the conditions of limitation of farming land and extensification of agricultural production.

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