The Roles of Technical Change and Efficiency improvement for the Agricultural and Food Economies in the EU member countries

The EU enlargement has given new opportunities for the agricultural and food economies of the new member countries in Central Europe. Agricultural income in the farm household level has risen. A concern for sustainable development of the agricultural sector exists for the EU member countries. The diversion of production performance measured by agricultural productivity growth has been observed among existed EU15 countries as well as new EU member countries after the EU enlargement of 2004.

This increase in variability in TFP growth for agriculture seems to have been induced partly by the emphasis on the importance of rural development through the Pillar II type policy measures. The productivity study on the food processing sector indicated that productivity growth was observed after 2004 in selected new member countries.

The present study examines the contribution of technical change and efficiency improvement for productivity growth using the Malmquist decomposition method to understand sources of productivity better. This study shows potential approaches for productivity growth in the EU member countries for the future years.