CHANGES IN THE PROFITABILITY OF FARMS IN EUROPEAN UNION MEMBER STATES – CONVERGENCE OR DIVERGENCE?

Abstract

This paper aimed at evaluating the differences within the European Union (EU) regarding profitability of farms and answering the question whether in 2007-2015 any trends at convergence of their income position occurred between member states. The survey covered farms maintaining farm accounts under FADN (Farm Accountancy Data Network) in 27 member states of the EU. Convergence was evaluated based on the coefficient of variation (sigma convergence) and the relative index of variation in respective member states of the EU in comparison to the EU average in the analyzed period (beta convergence). The surveys point to large disparities in the level of profitability between farms in European Union member states. The highest profitability of work was recorded in countries such as Luxembourg, Netherlands, Ireland, Italy and Belgium. In all new member states the analyzed ratio was relatively low and none of them exceeded the average level for the EU. In 2015 the lowest profitability of land was characteristic of Slovakia, Estonia and Denmark, whereas the highest income per 1 ha was achieved by agricultural producers in Malta, Italy and Greece. In the analysed period no clear trends were observed in convergence or in profitability of work or profitability of land, which means that inequalities between countries with a different level of agricultural development did not disappear. 

Keywords: convergence, European Union, farms, income

Article DOI: http://doi.org/10.15544/RD.2017.092