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The Common Agricultural Policy and productivity gains in Romanian agriculture: is there any evidence of convergence to the Western European realities?

Author

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  • Jitea, Ionel-Mugurel
  • Pocol, Cristina Bianca

Abstract

When Romania joined the European Union (EU) in 2007, it did so with significant structural drawbacks. This paper investigates, in this context, the influence of the considerable levels of financial support given under the Common Agricultural Policy (CAP) on the overall productivity of Romanian agriculture. Using data for a 15-year time horizon (1998-2013), we show that the policy incentives have not yet produced any positive effects on the Total Factor Productivity index. Moreover, the increases in the input index remain higher than the output index, reducing the overall productivity of Romanian agriculture. This is explained by a low share of high value-added products in the total agricultural production and agricultural structures that are not yet compatible with those of Western Europe. The new CAP financial allocation must correct these negative findings by supporting new investments in the food processing industry and the better marketing of agricultural products.

Suggested Citation

  • Jitea, Ionel-Mugurel & Pocol, Cristina Bianca, 2014. "The Common Agricultural Policy and productivity gains in Romanian agriculture: is there any evidence of convergence to the Western European realities?," Studies in Agricultural Economics, Research Institute for Agricultural Economics, vol. 116(3), pages 1-3, December.
  • Handle: RePEc:ags:stagec:196910
    DOI: 10.22004/ag.econ.196910
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    File URL: http://ageconsearch.umn.edu/record/196910/files/10-1429.pdf
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    References listed on IDEAS

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    1. Sahrbacher, Amanda, 2012. "Impacts of CAP reforms on farm structures and performance disparities: An agent-based approach," Studies on the Agricultural and Food Sector in Transition Economies, Leibniz Institute of Agricultural Development in Transition Economies (IAMO), volume 65, number 65, 09-2019.
    2. A. Tonini, 2012. "A Bayesian stochastic frontier: an application to agricultural productivity growth in European countries," Economic Change and Restructuring, Springer, vol. 45(4), pages 247-269, November.
    3. Marian Rizov & Jan Pokrivcak & Pavel Ciaian, 2013. "CAP Subsidies and Productivity of the EU Farms," Journal of Agricultural Economics, Wiley Blackwell, vol. 64(3), pages 537-557, September.
    4. Pavel Ciaian & Johan F.M. Swinnen, 2009. "Credit Market Imperfections and the Distribution of Policy Rents," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(4), pages 1124-1139.
    5. Greene, Joel, 1994. "High-Value Food Products Boost Agricultural Exports," Food Review/ National Food Review, United States Department of Agriculture, Economic Research Service, vol. 17(3), September.
    6. Ciaian, Pavel & Swinnen, Johan F.M., 2009. "AJAE appendix for ‘Credit Market Imperfections and the Distribution of Policy Rents’," American Journal of Agricultural Economics APPENDICES, Agricultural and Applied Economics Association, vol. 91(4), pages 1-10, February.
    7. Lee, Jung-Hee & Henneberry, David & Pyles, David, 1991. "An Analysis Of Value-Added Agricultural Exports To Middle-Income Developing Countries: The Case Of Wheat And Beef Products," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 23(2), pages 1-14, December.
    8. Key, Nigel D. & Roberts, Michael J., 2007. "Do Government Payments Influence Farm Size and Survival?," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 32(2), pages 1-19, August.
    9. Hubbard, Carmen & Luca, Lucien & Luca, Mihaela & Alexandri, Cecilia, 2014. "Romanian farm support: has European Union membership made a difference?," Studies in Agricultural Economics, Research Institute for Agricultural Economics, vol. 116(2), pages 1-7, August.
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