The study analyses main developing trends in agricultural industry of the selected EU-15-member states in Central-East Europe for 2010 and 2017. EU member states are Estonia, Latvia, Lithuania, Poland, Czech Republic, Slovakia, Hungary, Romania, Bulgaria, Slovenia, Croatia, Italy, Greece, Austria and Denmark. The importance of research is that the Visegrad-4 EU member states as Poland, Czech Republic, Hungary and Slovakia have realised an ambition economic and agricultural development at highest level in EU-28. Other East and Central European economies also have played significant role in most developing trend of performance and agriculture of EU-28. Analysing agricultural development of these states is based on SPSS statistical system. This analyse demands five economic variances based on difference among selected 15 states in field of their agricultural development.
Based on the measure correlation is very strong between OUTPUT171 and INPUT172. Correlations are middle strong in these cases, namely between OUTPUT171 and Privinv164 by 0,603 and between INTPUT172 and Privinv164 by 0,463 also between GVA173 and RIFAWU175 economic variances by 0,562. These means that if the OUTPUT171 increases the INTPUT172 also increases, also if the OUTPUT171increases the Privinv164 increases or if the INTPUT172 increases the Privinv164 increases. The same trend is valid in cases of correlations between GVA173 and RIFAWU175 economic variances.
When increasing level of the input is less than the increasing level of the output, therefore the gross value added will increase. Because the average increasing level of the output in EU-15 increases more than the input, the gross value added considerably increases. In case of EU-28, the output increases more than the input, therefore the gross value added also increases, but this increase less than the one of EU-15, because the increase of output of EU-15 more than one of EU-28.
Keywords: Private investment, Real income factor, SPSS, Hungary, Development
JEL code: O1, 013, 014
The study analyses the main developing trends and differences in agricultural industry of the selected EU-15-member states in Central-East Europe for the period of 2010 and 2017. These EU member states are Estonia, Latvia, Lithuania, Poland, Czech Republic, Slovakia, Hungary, Romania, Bulgaria, Slovenia, Croatia, Italy, Greece, Austria and Denmark.
The main researching fields for the agricultural conditions of this EU region:
Agricultural production growth;
Efficiency of the agricultural production (real income factor; output/input; gross value added/real income; private investment; real labour productivity per annual working unit)
Income conditions of agricultural producers, farmers: price income, taxed income;
Central subsidies changes for farmers.
Number of the annual working unit (AWU)
Balance of Foreign Direct Investment and the National Domestic Investment in case of performance of the EU-15-member states and its influences on the investment in agricultural industry.
Generally, the importance of the research is that the Visegrad-4 EU member states as Poland, Czech Republic, Hungary and Slovakia have realised an ambition economic growth with agricultural development at highest level in all of the EU-28 according to the statistical data of Eurostat. Additionally, to the Visegrad-4 EU member states the other East and Central European economies of the EU-28 also have played significant role in most developing trend of performance and agriculture of the EU-28. Therefore, the study and research are focusing on this region of EU-15 including Austria, Italy and Denmark. In spite that these three countries are not so strong in their performance or less than performance of Germany, France and UK (United Kingdom), but their performance and agricultural development of even Austria and Denmark are very strongly consequence. Also, agricultural industry of Italy is very famous and plays more important role in its performance than in the performance of the other three EU member states as Germany, France and UK. Italy and its capital Rome provide residence place of the FAO of the UN, namely Food and Agricultural Organization, therefore I requested to extend my PhD research work also for Italy.
The scientific economic analyses are based on the main EUROSTAT statistical sources covering wholly the economic conditions of all of the EU-28 member states including the EU-15 member states analysed in this dissertation. The data base of the selected EU-15 member states are summarized in Table-1, base of which is calculation for the correlation and significance among economic variances. According to the developing agricultural industry, this also needs for the well operating and working bank-system and bank-controlling should be set up, therefore the controlling works concerning banks connecting with developing, planning and ensuring issues, which mean first market risk, structure income options and increasing potential. Also, when companies need for financial resources, even for investment relevant to the pollution, in any case the financial institutes should follow the financial conditions and risk management of the firms or small-medium enterprises, for example analyse all business cycles, evaluate the risks and determine risk sensitivity of company” (Hegedûs-Zéman, 2016).
The job-work places creating can and also should accompany with extending environment friendly technology in order to decrease and mitigate gas emission causing the global warming. The green investment strategy appears in the agricultural sector concerning the water management, irrigation and renewable energy resource use with international experiences of the EU, East Asian and Pa-ci-fic Re-gi-on (see in Zsarnóczai – Bence, 2018; Gál et al, 2016).
Material and Method
The research focuses on the agricultural development of these EU-15 member states, which is based on the SPSS statistical system (SPSS = Special Program for Social Sciences, Sajtos-Mitev, 2007; Huzsvai –Vincze, 2012). This research analyse demands for five economic variances as bases for the analysing the difference among selected 15 states in field of their agricultural growth and development. The SPSS system provides correlations and significance among the economic variances, which can be followed in the Table-2. The correlations among the variances can be strong if the value is more than 0,500 or by the other word 50,0%, but if the value is closed to 0,500, the correlation is middle, or if the value is under 0,500 (50%) the correlation is weak. Naturally if the value of the correlation is closed 1,000 (100%) the correlation is very strong.
The Table-1 summarised the main statistical data base concerning the five economic variances for the agricultural industry of the selected EU-15 member states between 2010 and 2017 (2010=100). The Output of the agricultural industry and Gross value added of the agricultural industry are known by the Eurostat statistical data base for all EU member states, therefore the INPUT can be calculated from these economic variances, namely OUTPUT-GVA = INPUT by my owned calculation. Also, the Private investments concerning the consumption of the fixed capital and the Real Income Factor per Annual Working Unit equivalent at factor price can help to understand changes of the AWU (Annual working unit) in this period of 2010-2017.
This calculation method can be relevant to the demand accepted by all EU member states for determining the changes of the real income factor per AWU, therefor the compare can be easier among the selected EU member states in this field. Also, the Table-1 shows the selection of the economic variances into two components and distribution of the selected EU-15 member states into five clusters within the SPSS statistical system calculates. The selection and clustering of the EU-15-member states in the Table-1 are in detailed coming from tables and figures based on the SPSS system.
Also, the financial strategy and management at national level should be extended similarly to the firm–level, in which role of governance, organizing, planning and controlling according to well-defined goal criteria; preparation and realization of raising capital owners even in agricultural industry (Széles et al, 2014; Lentner, 2018). The policy handling crisis and the increasing role of state in the national economy based on the unorthodox policy strengthening.at present can be seen in detailed.in Lentner, (2017). Also, the difficulties are coming from the costly expenditures of innovative advanced technology relevant to the environmental conservation (Gan, Quan et al, 2016).
Results and Discussion: Statistical analyses based on five economic variances
It can clearly be seen that for this period of 2010 and 2017, the EU member states in East Central Europe have realised a considerable growth in field of the agricultural income comparably to results of the other EU member states. The increase of the agricultural income could be based on the growing agricultural productivity in the selected EU-15 member states including East Central European EU member states in this research. The Growth rate of Factor Income per AWU (annual working unit) has increased by 25,2% for the period of 2010 and 2017 (2010=100; see Table-3; Eurostat 2018). The Table-3 shows that the subsidies on the production in agricultural industry were mostly covered for Consumption of fixed capital in share of 86,6% in 2017. Therefore, the agricultural productivity could improve by increasing advanced technologies and equipment.
Based on the measure the correlation is very strong between OUTPUT171 and INPUT172 (see Table-1 and Table-2). The correlations are middle strong in these cases, namely between OUTPUT171 and Privinv164 by 0,603 (60,3%) and between INTPUT172 and Privinv164 by 0,463 (46,3%) also between GVA173 and RIFAWU175 economic variances by 0,562 (56,2%). These means that if the OUTPUT171 increases the INTPUT172 also increases, also if the OUTPUT171increases the Privinv164 increases or if the INTPUT172 increases the Privinv164 increases. The same trend is valid in cases of correlations between GVA173 and RIFAWU175 economic variances. Naturally if one economic variance changes the other economic variance changes by the same term or increases or decreases dependably on the other variances (Table-2).
The correlations are strong among these variances, because if the input, as intermediate consumption of the agricultural industry in selected EU-15 member states increases, this can stimulate the output to increase or the opposite to this one. When the output (OUTPUT171) for example by less results of the plan production, as crop output or animal husbandry, as animal output, or agricultural services, even the secondary activities decrease, this can be resulted by the decreasing trends of the input (see in detailed in Table-2). If farmers use less input (INPUT172) for example less fertiliser and pesticide the yields of the crop production, as crop output will be less.
In the same time the output and the input have middle strong influences on the changes of the private investments, but also when the private investments increase, therefore the input and output should increase in order to create the efficient production process finally accompanying with more favourable income positions of farmers and their farming households. Based on the calculation methods used by the Eurostat, it is very clear that the gross value added makes considerably directly influences on the real income factor per AWU (annual working unit).
In this case this means that not the output or the input singly alone can make influences on the change of the real income factor per AWU, but the difference of the output and input, as the gross value added (GVA) can make influences on the income positions, as income factor of farming household. Naturally the private investments including the consumption of fixed capital can stimulate the position of the GVA, but not directly on the changes of the real income factor. Also, it should be mentioned that the correlation is between the OUTPUT171 and GVA173, but this is weak and not strong, because of its value is 0,389 (38,9%).
In the Table-2 there is a diagonal by value 1,000 in the section of the Correlation and from the diagonal up right and down left, all of the values are the same. Also diagonal by value 0,000 in the section of the Significance and from the diagonal up right and down left, all of the significance values are the same. From point of view of the significance the significance among the economic variances can be strong if the value is zero “0” or much closed to “0”. The strong significance is between the OUTPUT171 and INPUT172 by value as 0,000, and between the OUTPUT171 and Privinv164 by value as 0,009, and between the GVA173 and RIFAWU175 by value as 0,015. Also, there is an important considerable significance are between the INPUT172 and Privinv164 by value as 0,041, and between the OUTPUT171 and GVA173 by value as 0,076.
The importance of the score (coordinate system) that this visually shows or applies the positions of the selected EU-15 member states in the score by value of economic variances based on the statistical data according to the EU-15 member states. Therefor the values of economic variances show the measures of the correlations among economic variances as economic characters of the selected EU-15 member states in the score (see Figure-1).
In the first session or quarter of the score (see Figure-1) there are several EU member states, namely Hungary, Lithuania and Latvia. Economic variances of the Component-1 including the OUTPUT171, INPUT172 and PrivInv164 (Private investment) are laying on the principle line “X”, while the economic variances of the Component-2 including the GVA173 (Gross value added) and RIFAWU175 (Real income factor for Annual working unit) are laying on the principle line “Y”. Therefore, this means that in these countries or EU member states of this quarter of the score generally the OUTPUT171, INPUT172 and PrivInv164 (Private investment) are increasing or little decrease and also the GVA173 (Gross value added) and RIFAWU175 (Real income factor for Annual working unit) of the “Y” line are increasing or little decrease.
This result was very attractive for the EU-15 and for these three member states of this quarter of the score. In this quarter Lithuania reached 53,8% increase in field of the output, which was the first highest level increase in all of the EU-28, where the average level of increase was 15,9%, while in EU-15 selected member states was 20,66% even more than the average of EU-28. Lithuania reached the third biggest increase in field of input after Latvia and Estonia. Lithuania have implemented the highest level in increase of private investment by 82,3% in selected EU-15 member states of which the average increase was 18,65% more than 10,1% of increase of EU-28 for the reached period since 2010. These very attractive results of Lithuania have generated 90,7% increase in field of gross value added therefore 50,0% in field of real income factor per AWU for the same period. In spite that this real income increase was moderate in cases of EU-15, this was higher than the average level of EU-15, of which was 39,2%, but result of Lithuania was two time more than the real income growth of the EU-28, which had 25,2%.
The results of Lithuania in fields of these five economic variances provided proof that how much this member state had relative backwardness from the highest advanced level of the EU-28 and also the intensive private investment could generate considerable increase in field of real income factor for AWU. In Lithuania the first important aim was increasing and stimulating the more intensive private investment and only after that the increase of real income factor generated by intensive investment. The first aim was the increase in field of the private investment and only after that the second aim was the growth in the real income factor. This order and rule can keep the efficient and sustainable agricultural production growth by using advanced technology either in Lithuania or in EU-15 and EU-28. The naturally the agricultural production should be concentrated more in order to increase the efficient level of the agricultural production. Because more yield can be produced per each unit of the production cost or input by using advanced technology and techniques even equipment based on the improving innovation extending knowledge of farmers.
In this quarter of the score there is a member state, namely Latvia, which member state has realised positive considerable increase mostly in field of input and gross value added. After Lithuania the second was Latvia in field of growth of output by 51% within EU-15 member states. This considerable growth of output was based on the strong concentrated increasing trend of input with efficient using input resources by 46,5% increase, which was the top of input increase in cases of EU-15 and EU-28. In EU-28 the input growth rate was 11,6%, opposite of which the Latvia realised 4,5 times more growth. Latvia could have realised this considerable growth mostly by increasing input as Intermediate consumption (input), which was resulted by missing considerable increasing private investment. It can be declared that Latvia mostly increased output of its agricultural production industry by extensive methods and not intensive investments by using more advanced mechanical instruments or means. Because of Latvia could increase the output therefore this member state increased its gross value added of agricultural industry by 64,8% in the fifth position after Lithuania, Croatia, Slovakia and Czech Republic within EU-15. Because of the use of human resources as workers in agricultural industry has been considerable, therefore their real income factor for AWU should increase, which was 38,2% for researched period since 2010.
In the second session or quarter of the score (see Figure-1) there are several EU member states, namely Bulgaria, Czech Republic, Slovakia and Croatia. The economic variances of the Component-1 including the OUTPUT171, INPUT172 and PrivInv164 (Private investment) are laying on the principle line “X”, therefore in these EU member states of this quarter of the score generally the OUTPUT171, INPUT172 and PrivInv164 (Private investment) are decreasing or little increasing, while the economic variances of the Component-2 including the GVA173 (Gross value added) and RIFAWU175 (Real income factor for Annual working unit) are laying on the principle line “Y” are remaining in increasing or little decreasing trends similarly to the first quarter of the score.
In cases of Slovakia and Czech Republic EU member states in this quarter the economic variances, namely OUTPUT171, INPUT172 and PrivInv164 (Private investment) are increasing moderately comparably to these one of other four member states in the first quarter. Somehow the private investment activities have been going on increasing at low level, about 10% since 2010, therefore the output of agricultural industry of two countries also was at low level, namely by between 24,9% and 26,7%, but the real income factor per AWU has considerably been increasing by 53% in Czech Republic and 105,4% in Slovakia. Also, gross value added of both countries increased by highly level as 73,6% in Czech Republic and 80,4% in Slovakia. This means that two countries could ensure the highly level increase of GVA173 by the low-level increase of input by 9,7% in Czech Republic and 14% in Slovakia.
In case of Czech Republic, the relative highly concentrated land and the earlier more mechanized agricultural industry could contribute to decrease the Intermediate consumption (input) of the agricultural production. The low level of input could ensure the strong increasing trend of gross valued added by 73,6% and considerable increase for the real income factor per AWU, namely 53%. In spite that in Slovakia the input and output increased little more than Czech Republic and therefore the gross value added increased by 80,4% in Slovakia, the Slovak real income factor has increased mostly by two times than in Czech Republic. The increase of gross value added was not so different between cases of two countries, but increase of their real income factor was quietly different, because this was in Czech Republic by 53%, while in Slovakia this was 105,4% (Table-1 and Eurostat, 2017 and 2018). This income difference can be explained by the different measure of taxes in two countries.
In case of Slovakia the possible of less competitiveness in agricultural industry can occur, because the higher real income factor per AWU was resulted mostly by national tax policy and not more using advanced technology by increasing private investment. The competitiveness can mostly set up on based on the investment concerning the highly developed advanced technology and not simply income increase. Naturally the EU law harmonization allows the more independence for the EU member states in field of tax policy, but the agricultural policy should be common including the price and subsidy systems. Probably the more favourable tax policy contributed to increasing real income factor in Slovakia, than in Czech Republic.
In case of Bulgaria, this member states have decreased input for agricultural industry by 7,1% since 2010 and also increased the private investment by 22,1%, but the investment activities did not compensate enough the decreasing trend of the input, therefore the output of the country was at low level, mostly half of the average output increase of the selected EU-15 member states of my dissertation. In spite that the agricultural industry of Bulgaria provided less output increase, this country could implement 41,8% increase in field of gross value added and increase by 126,7% in field of real income factor per AWU, which more by four times than the average level of the real income factor in selected EU-15-member states and more by five times than average level of the EU-28 in the same period. This considerable increase of real income factor in Bulgaria partly realised by increasing private investment and probably favourable tax policy for farmers. Also, it can be true that Bulgaria had mostly less level of the results in field of private investment, gross value added and real income factor comparably to the level of these field of the other EU member states.
In Croatia all of three economic variances as output, input and private investment has considerably decreased by 24,4%, 20,4% and 5,5%, therefore this country has a negative decline in field of agricultural industry within EU-28 and selected EU-15 member states in the researched period. Only in Greece the private investment decreased by 36% against 5,5% in Croatia. In spite that Croatia implemented the worst results in field of agricultural industry within EU-28, the gross value added increased by 71,2%, which was the fifth best result in EU-15, after Lithuania by 90,1%, Hungary by 81%, Slovakia by 80,4% and Czech Republic by 73,6%. Also, the result of the GVA was mostly more by 1,5 times than the average level of the EU-15 and by three times more than average level of the EU-28 member states (see Table-1; Figure-1).
This contradiction result of agricultural industry in Croatia was resulted by the possible earlier over-production, which was demanded for decreasing. The real income factor per AWU very moderately increased by 17,9%, which was less than the average level of either EU-28by 25,2% or EU-15 by 39,2%. The low level of real income factor in Croatia was resulted that the subsidies were depended on the private investment for Consumption of fixed capital, therefore because the private investment decreased in Croatia, the subsidies also decreased, which finally led to decrease the real income factor. The decrease of the real income factor resulted by output and private investment decreases could not be compensated by favourable tax policy for farmers to increase their incomes (Table-1; Table-2; Eurostat, 2018). For example, the all of the amount covered for Consumption of fixed capital, as private investment was 60,8 billion euro in 2016 in EU-28 and in the same time the subsidies were 52,6 billon euro, which compensated the 86,5% of all Consumption of fixed capital, as private investment. Naturally the subsidies on the production should compensate cost of the private investment and not to increase the real income factor per AWU.
In the third session or quarter of the score (see Figure-1) there are two EU member states, namely Estonia and Poland. The economic variances of the Component-1 including the OUTPUT171, INPUT172 and PrivInv164 (Private investment), which are increasing or little decreasing similarly to the first quarter of the score, while the economic variances of the Component-2 including the GVA173 (Gross value added) and RIFAWU175 (Real income factor for Annual working unit) are decreasing or little increasing trends.
In Estonia three economic variances namely output, input and private investment at line “X” have considerably increased more than in Poland, but opposite to this trend in Poland the gross value added and real income factor at line “Y” have increased more than in Estonia for the researched period. Therefore, Poland has a better position than in Estonia in the third quarter of the score. The biggest difference was between two-member states in field of real income factor, because in Estonia the real income factor has increased by 8%, while in Poland the increase of the income per AWU was 40,4% as by five times more than in case the first country.
The agricultural industry of Estonia has less competitiveness comparably to one of Poland. In Estonia increasing rate of private investment was 37,1%, as two times more than in Poland namely by 19,1%, also the increase of the input was higher by one third, namely 40,2% than in Poland, where this was 30,5%. In spite that this more ambition increasing trend in two fields Estonia could only implement increase 32,6% by little more in field of output than in Poland, namely 30%. Also based on the less increase in fields of input and private investment in Poland, the Polish agricultural industry has realised considerable increasing trend by 29,4% in gross value added opposite to trend as 18,3% in Estonia. In Estonia the real income factor per AWU has increased only by 8%, while the real income increased by 40,4% in Poland since 2010. This means that in Estonia the considerable private investment could not probably be efficient, and additionally to this private investment, the input as intermediate consumption was at level of so highly increasing rate accompanying with little increase of the gross value added. Therefore, in Estonia the considerable increasing rate was but less efficient private investment and so highly increasing rate in input with less gross value-added increasing rate, even under level of the EU-28, led to unfavourable increasing rate of the real income factor per AWU.
In Poland the land use concentration could also contribute to the considerable increasing rate in field of the real income factor per AWU, which could make possibility to realise efficient private investment, mostly better mechanization than in Estonia. In Poland in spite that the increasing rate in input was considerable, Poland could achieve mostly the same increasing trend in both of output by 30% and gross value added by 29,4%. Partly the efficient private investment and partly the increasing rate in gross value added resulted in considerable increase rate in field of real income factor. The increasing rate of subsidies on production in Poland was higher by 22,4% than 1,2% in Estonia, because of more efficient private investment was realised in Poland than in Estonia (se e Table-1; Eurostat, 2018), while in Poland the favourable tax policy could not play more important role for increasing real income factor than in Slovakia and Bulgaria, where the real income factor mostly increased by 2-3 times more than in Poland.
In the fourth session or quarter of the score (see Figure-1) there are several EU member states, namely Austria, Denmark Greece, Italy, Romania and Slovenia. The economic variances of the Component-1 including the OUTPUT171, INPUT172 and PrivInv164 (Private investment), which are decreasing or little increasing similarly to the second quarter of the score, while the economic variances of the Component-2 including the GVA173 (Gross value added) and RIFAWU175 (Real income factor for Annual working unit) also are decreasing or little increasing trends similarly to the third quarter of the score.
Generally, it is clear that the highly developed EU-member states of this quarter, namely Austria, Denmark and Italy have about 15% increase in field of output, which is mostly equal with middle average level of EU-28, but clearly less than the 20,66% at the average level of output for the selected EU-15.
Greece has had the worst and the lowest decreasing level in field of the private investment by 36% in the selected EU-15-member states for the researched period. Also, the not so highly increasing level of input by 10,4% in this period contributed to less increasing level of the output, which was the second lowest after Slovenia in EU-15. Consequently, in Greece these negative results of the agricultural industry led to the very low increasing level of the gross value added by 3,4%, which was the lowest level in EU-15. This economic process led to the lowest changing level of the real income factor per AWU by decreasing 1,4%.
The reason of the unfavourable agricultural industry of Greece is the luck of capital. The agricultural production concentration in Greek agricultural industry was at very low level, therefore the capital accumulation was very weak with less using advanced technology and techniques resulting considerable decrease of output, which lead to the decreasing trend for the competitiveness of the Greek agricultural industry and the farmers. The less output resulted in less price incomes and unfavourable income conditions for farmers, therefore the less price income ensures for future continuous luck of capital and weak capital power for the following negative prosperity. The farmers and population of the rural areas of Greece will continuously be poor or poorer and rural areas cannot keep the original population in their regions. Therefore, the domestic population migration can be stronger in the future. The possible rural tourism is alone, which is not enough to ensure quite satisfactory income to remain for the local – rural population in village areas.
The second lowest decreasing level of the real income factor for the AWU has been in Slovenia by decreasing trend 1,6% for the period of 2010 and 2017. This result occurred in this country, in spite that the private investment has increased by 19,1%, which was higher than the average increasing level of the EU-15 by 18,65% and mostly double than in EU-28 by 10,1%. Also, Slovakia could keep at lower level the increasing trend of the intermediate consumption as input by 3,1% less than in Greece by 10,4%. The considerable increase in field of private investment and the lowest level of the input made possibility for Slovenia to get more than two times increase in gross value added by 8,7%. But these better positions of Slovenian agricultural industry were not enough to increase the real income factor, because this decreased by 1,6% more than the level of Greece. These agricultural economic conditions of Slovenia provided proof, which shows the low-level measure efficiency and productivity of the private investment and generally the agricultural industry in Slovenia.
In Italy some difficulties of the agricultural industry could be the similar as these were in Slovenia and Greece, namely the low-level increase in fields of the private investment and input, which the private investment was even one third of the Slovenian investment. But the increasing rate of the output of Italian agricultural industry was higher by three times than one of Slovenia. Therefore, Italy could realise better increase rate of its gross value added by 21%, also more than two and half times more than the level of the gross value added of Slovenia, which this last one was by 8,7%. Italy could realise better income positions comparably to average increasing level of real income factor per AWU of Slovenia and EU-28, which this last one was 25,2%, because Italy could efficiently realise the private investment and keep the input as cost of the agricultural industry at low-level increase, therefore the output could increase closed to the average level of the EU-28 accompanying with increasing level of gross valued added by 21%, which also was closed to the average level of the EU-28. These agricultural results led to 32% increasing level of the real income factor per WAU in Italy. This highly level increase of real income factor could also be realised by highly level of price income, which partly was resulted by highly level price of basic food and agricultural basic products in Italy.
In this quarter of the score farmers of Romania had only higher increasing level of real income factor per AWU opposite to the other five EU-member states by 36,6%. This was resulted by partly originally low level of the real income factor comparably to the EU-28 and partly highly level increasing private investment 26,5% accompanying with adequate subsidies on the production. Generally, the highest increasing level of the economic or agricultural industrial growth not only in those countries, where the advanced technology and developed economic level can ensure, but in those countries, where the backwardness was considerable comparably to the average level of EU-28. Romania can be an example for this last one. Also, Romania could keep the low increasing level of the input by 8,7%, therefore the level of the output could increase by 12,3% in this period, which was not far from the level of the EU-28, namely 15,9%.
Sometimes it can happen, if the gross value added and the subsidies on the production less increase than real income factor per AWU increased, this can be resulted by the favourable tax policy at national economic level, which is not common and not unified based on the law harmonization of EU system. The tax policy remained within the national frame or scheme in each EU member state, in spite that the other policies, as agricultural policies, agricultural price policy and subsidy policy for the farmers or even the duty and single market condition are common. (Bulgaria, Slovakia, Italy, Lithuania, Denmark,). In Romania the subsidies on production was at very highly level (sew Table-1), which allow the moderate increasing growth rate of the real income factor per AWU.
In Austria and Denmark, the agricultural industry is mostly highly developed comparably to the EU-28 and international developed level. The increasing level of the real income factor per AWU in cases of both of them are very similar to each other, namely 7% in Austria and 9,9% in Denmark.
In Austria the increasing level of the input is at very low level by 8,6%, while the increasing level of the output is 15,2% and because the level of the input was at low level, the gross value added could increase at quietly highly level by 24,8%. In spite that this increase of gross value added was enough at highly level in Austria the real income factor per AWU was at moderately low level by 7%. This had reason because the increasing level of the input including the AWU or labour force input was at low level and also the private investment increased at highly level by 30,1%, which withdrew considerable capital power from the side of the income positions of the labour input to the side of the private investment, therefore it can declare that the future increase for the income position was kept back little in order to realise more increase for the interest of improvement and development for the advanced agricultural industry. This means that for the interest of the future economic prosperity the country should keep back increasing the standard of life for shorter time period. In order that the country could become quietly developed, and this economic aim can be ensuring realised, therefore the above-mentioned economic arrangement should be followed.
Similarly, to Austria, this process can be followed in case of Denmark, where also the real income factor for AWU increased at low level comparably to the EU-28, where the real income increased by 25,2%, in spite that not all of the EU member states can be titled as highly developed countries. Also, it can be seen that in spite that in Denmark the increasing rate of private investment was only by 16,5% less than in Austria and the input increased by 12,6% more than in Austria, and also the gross value added less increased by 19%, the real income factor could increase little more than in Austria. Mostly the difference between levels of real income factor of both of countries were not considerable, but this difference could probably be created by the tax policy, which was more favourable in Denmark than in Austria.
Within this country-group of the fourth quarter of the score Austria achieved the best economic results mostly by 30,1% in field of increasing rate for the private investment with low level increase of input and real income factor against the other economies in this session of the score.
Within the selected EU-15-member states Bulgaria reached the highest increasing rate in field of real income factor and the second was Slovakia by 105,4% and the third country was Hungary by 66,2%. Also, the lowest level of increasing rate of real income was in Greece and in Slovenia. In field of private investment, the biggest increasing rate was in Lithuania, Estonia and Austria (see Table-1). These data concerning the fast-economic growth in selected EU-28-member states show that the developing trend continuously and consequently focuses on the Baltic region, Visegrad-4-member states of the EU and Bulgaria, Austria from point of geographical distribution. Naturally the economic positions for the EU member states are depending mostly on the increasing trend of private investment and gross value added.
In spite that in the EU at present not the subsidies completing or complementary are forced for the farmers, as it was early, but the subsidies on the production are accepted, therefore the subsidies aim at improving the production technology and to decrease the production as it was after the agricultural reform of 1992 in EU-12. In that time the suddenly agricultural price decrease resulted to income damage for farmers of the EU, therefore the policy makers decided to compensate partly these income damages for farmers. The agricultural price decrease was favourable for the interests of the consumers on the single market of the EU and this decrease aimed at decreasing the agricultural production to decrease the negative influences of the over agricultural production on the price system and the supply-demand balance of the agricultural products.
At present in the EU subsidies on the production aims at strengthen the market competitiveness of farmers of the EU against the agricultural competitors of the world economy by renewing the technology turning to the advanced one, in order that the farmers of the EU can have more competitive position either in the world market or in the single market. The possible competitive advantage including the innovative technology for farmers in EU can ensure more competitiveness than the complementary subsidies for the longer time. In this case also policy makers of the EU focus on the decreasing the standard of the life for farmers by substituting increase of this one for the technological development. This new agricultural conception has resulted in decreasing number of farmers in the EU and concentrating the agricultural production within a smaller number of farming households. This trend can also be followed by the actual data base of EU.
Also, it can be mentioned that the new EU member states mostly including the Visegrad-4 states could realise more economic growth either at national economic level or the agricultural industrial level. In spite that of the private investment of the selected EU-15 shared about one quarter of the all EU-28 namely by 24,5%, but their gross value-added share about 40% of all EU-28 was by the end of the 2017. In spite that the increase of their input was 14,45% more than 11,6% of the average level of the EU-28, but also increase of their output, namely 20,66% was higher than one of the EU-28, namely 15,9% (see Table-1). The shares of the input belonging to EU-28 and selected EU-15 are not considerable different in the analysed period.
In case of Hungary the output, input and the private investment on the “X” line have increased, but the gross value added and the real income factor per Annual working unit have increased more than the increasing trend of the other three economic variances on “X” line. This means that the little moderate increase in field of private investment in Hungary could have generated three times more increase in case of the gross value added and two and half time more increase of real income factor for annual working unit for the same time period. In this period the first biggest increase of the gross value added was in Lithuania by 90,7% increase and Hungary were the second member state and third member state was by 80,4% after Hungary at very directly. The average increasing level of gross value added in EU-15 was 43%, while in EU-28 this rate was only 21,9%.
It can be declared that in those cases, when the increasing level of the input is less than the increasing level of the output, therefore the gross value added will increase (Bulgaria, Czech Republic, Hungary, Slovakia, Austria, Denmark, Italy, Romania, Slovenia, Latvia, Lithuania). Because the average increasing level of the output in EU-15 increases more than the input, the gross value added considerably increases. In case of EU-28, the output increases more than the input, therefore the gross value added also increases, but this increase less than the one of EU-15, because the increase of output of EU-15 more than one of EU-28 (Table-1).
When the increasing level of the input is more than the increasing level of the output, therefore the gross value added will less increase (Greece, Estonia).
If the increase level of the private investment accompanying with its efficiency is considerable, this one can also increase the gross value added, even if the level of input decreases (Bulgaria, Poland, Croatia).
Also, it can be declared that if the private investment considerably increases more than the increase of gross value added (Slovenia, Estonia, Austria), or their increasing trends are closed to each other (Denmark), this leads to the considerable decreasing or little increasing trends of the real income factor per annual working unit.
But if the private investment decreases more (Croatia) or increases less than the gross value added (Bulgaria, Czech Republic, Hungary, Slovakia, Italy, Latvia, Poland), therefore the real income factor per annual working unit increases. Also, the average increasing level of the private investment less increases than the gross value added in cases of the EU-15 and EU-28-member states, therefor the real income factor per annual working unit increases.
In case of EU-28, the private investment increases less than the gross value added, therefore the real income factor per annual working unit also considerably increases, but this increase less than the one of EU-15, because the increase of private investment of EU-15 more than one of EU-28 (Table-1; Table-3).
Generally, the measure of the subsidies on production is depending on the measure of the private investment by the other words, consumption of fixed capital at level of the EU-28, which has an important influence on the change of the real factor income per AWU.
Therefore, these subsidies can only be provided for farmers if subsidies are covered about 88% for extending and improving the production by using new technologies or creating the new advanced infrastructure for the production process, for example buildings, service network for improving agricultural techniques and equipment or innovation for the increasing knowledge for farmers and labour force in agricultural industry (Table-3).
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Nikola Trendov, PhD Student
Doctoral School of Management and Business Administration
Faculty of Economic and Social Sciences, Szent István University
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