The Dairy Sector in the Central European Candidate (CEC) Countries – The Status of Restructuring and Future Challenges

The dairy sector in the CEC countries had to cope with tremendous adjustment pressures in the 90ies. Privatization and liberalization contributed to intense competition on the CEC countries’ dairy market. Major problems that impede the competitiveness of this sector are a considerable fragmentation of the dairy processing industry, pronounced excess capacities, high seasonality of milk production and low investment activities. The latter delays the modernization of processing technologies and thus hinders quality improvements and the adjustments of hygienic conditions as well as product and process standards to EU norms. These problems are common to all CEC countries, though to different degrees. In addition, especially in Bulgaria and Romania, but also in Poland, Lithuania and Latvia the dairy industry is burdened by the low quality of the raw material and high milk collecting costs. Improving technical as well as economic efficiency in the primary and processing sector and seeking strategic alliances are necessary to secure the competitiveness of the CEC countries` dairy industry in EU and world markets.Central European candidate countries, dairy industry, restructuring process, competitiveness, Agribusiness, Livestock Production/Industries,

Will Baltic Agriculture Survive After EU Accession?

International Relations/Trade,

Agricultural and food trade in Central and Eastern Europe: the case of Slovenian intra-industry trade

One of the striking features in Central and Eastern European (CEE) countries is the deterioration of their agricultural and food trade balance during transition to a market economy as im-ports increased faster than exports or exports even declined. This paper investigates the Slovenian agricultural and food trade in more detail focusing on changes in the geographical distribution of trade and the nature of trade specialization on the basis of the Grubel-Lloyd Intra-Industry Trade index and Marginal Intra-Industry Trade Indices. The results indicate that Slovenian agricultural and food trade largely remains of the inter-industry type with specialisation of exports towards the former Yugoslav markets and imports from the European Union. The proportion of intra-industry trade was especially low for bulk commodities with little or no processing. A major explanations for these findings is that despite the free trade agreements Slovenia signed with the EU and countries of Central and Eastern Europe the level of protection in the agricultural and food sector has remained rather high. Due to EU membership Slovenia faces now direct competition in a market of 25 countries. This intensifies the restructuring process in the Slovenian agricultural and food sector. Due to the present low level of IIT this likely induces rather high adjustment costs since restructuring and reallo-cation of factors will have to occur between and not within industries. -- G E R M A N V E R S I O N: Eine der bemerkenswertesten Entwicklungen im Transformationsprozess der mittel- und ost-europäischen Länder ist die Verschlechterung ihrer Agrarhandelsbilanz als Folge rasanter steigender Importe als Exporte oder aufgrund sinkender Exporte bei stagnierenden oder stei-genden Importen. Gegenstand der vorliegenden Studie ist eine detaillierte Analyse von Ver-änderungen in der geographischen Verteilung des Handels als auch in der Art der Handels-spezialisierung in Hinblick auf den slowenischen Agrar- und Ernährungshandel. Die Analyse der Art der Handelsspezialisierung erfolgt auf Basis des Grubel-Lloyd Intra-Industriellen Handelsindex sowie Marginaler Intra-Industrieller Handelsindizes. Die Ergebnisse zeigen, dass Sloweniens Handel mit Agrar- und Ernährungsgütern nach wie vor primär inter-indus-trieller Natur ist. Dabei erweist sich die EU als wichtigstes Herkunftsland für die Importe Sloweniens, wogegen die Exporte des Landes vorrangig auf den Märkten des früheren Jugos-lawiens abgesetzt werden. Intra-industrielle Handelsströme sind vor allem unbedeutend für landwirtschaftliche Produkte mit geringer oder keiner Verarbeitung. Eine wesentliche Erklä-rung für diese Resultate ist, dass trotz des Abschlusses verschiedener Freihandelsabkommen mit der EU und Ländern Mittel- und Osteuropas das Protektionsniveau für Agrar- und Ernäh-rungsgüter nach wie vor sehr hoch ist. Als Mitglied der Europäischen Union sieht sich Slo-wenien nun unmittelbar dem Wettbewerb in einem Markt von 25 Ländern ausgesetzt. Dies wird den Restrukturierungsprozess im slowenischen Agrar- und Ernährungssektor verstärken. Auf Grund der geringen Bedeutung intra-industrieller Handelsströme wird dies zur Restruku-rierung und zur Reallokation von Faktoren zwischen und nicht innerhalb von Branchen führen und damit relativ hohe Anpassungskosten induzieren.Intra-industry trade,integration,agro-food sector,Intra-industrieller Handel,Integration,Agrar- und Ernährungssektor

Agricultural trade policies and trade relations in transition economies

The economic changes during transition involved a shift away from the planned foreign trade organization within the council for mutual economic assistance. Following a phase of farreaching trade policy liberalization, the agricultural sector in the Central and Eastern European countries (CEEC) has in the last years again been increasingly regulated. At the same time as the CEECs are striving for accession to the European Union, regional free trade agreements (FTA) and membership in the World Trade Organization (WTO) have gained importance. The analysis shows that an effective reduction of agricultural protectionism as a result of WTO obligations can only be expected from a small number of CEECs. The effects induced through changes in international agricultural commodity markets in the CEECs depend particularly on the trade status and the trade structure in the agricultural sector, as well as on internal macro- and agricultural economic distortions. An appraisal of regional FTAs such as the Central European Free Trade Agreement and the Baltic Free Trade Agreement has to take into consideration the Vinerian effects of trade creation and trade diversion, as well as non-traditional effects, such as an increase in credibility of political decisions, and the strengthening of the bargaining power of the countries involved. The Europe Agreements and the aim of accession to the EU are of crucial importance to the CEECs. In the framework of an empirical analysis it is shown that the countries which have not been invited to the first round of accession negotiations might be adversely affected by the first east enlargement of the EU. -- G E R M A N V E R S I O N: Die wirtschaftlichen Veränderungen während der Transformationsphase beinhalten eine Abkehr von der planwirtschaftlichen Organisation des Außenhandels innerhalb des Rates für Gegenseitige Wirtschaftshilfe. Nach einer Phase weitgehender Liberalisierung von Handelspolitiken in den Ländern Mittel- und Osteuropas wurde in den letzten Jahren wieder verstärkt regulierend in den Agrarsektor eingegriffen. Gleichzeitig gewinnen neben dem angestrebten Beitritt in die Europäische Union regionale Freihandelsabkommen sowie die Mitgliedschaft in der Welthandelsorganisation (WTO) zunehmend an Bedeutung. Die Analyse zeigt, daß eine effektive Reduzierung der Agrarprotektion aufgrund der eingegangenen WTO-Verpflichtungen nur von wenigen mittel- und osteuropäischen Ländern (MOEL) zu erwarten ist. Die über die internationalen Agrarmärkte induzierten Effekte in den MOEL hängen insbesondere von dem Handelsstatus und der Handelsstruktur im Agrarsektor sowie den internen agrar- und makroökonomischen Verzerrungen ab. Eine Bewertung regionaler Handelsabkommen wie des Central European Free Trade Agreement und des Baltic Free Trade Agreement muß neben den traditionellen Effekten, wie dem der Handelsschaffung und der Handelsumlenkung, auch die nicht-traditionellen Effekte, wie die durch die Abkommen induzierte Erhöhung der Glaubwürdigkeit politischer Entscheidungen und der Stärkung der Verhandlungsmacht dieser Länder mit einbeziehen. Die mit der EU abgeschlossenen Europa-Abkommen als auch der angestrebte Beitritt zur EU ist von herausragender Bedeutung für die MOEL. Im Rahmen einer empirischen Analyse wird aber auch gezeigt, daß die Länder, die zunächst nicht eingeladen werden, der EU beizutreten, negativ von der ersten Erweiterungsrunde betroffen sind.

Comparing measures of competitiveness

In their Europe Agreements with the EU, the Central and Eastern European countries stated their intention of joining the Union. To ease the process of accession these countries must adjust their economies already prior to becoming an EU-member. Agriculture requires special attention, because it still represents a large share of the total economy in these countries. A better understanding of the competitiveness of agricultural products at domestic and EU markets is essential for providing the necessary economic framework to make the process of joining the EU as smooth as possible.Competitiveness can be analyzed at various levels of the economy: at the enterprise level, the sector level, or the level of the entire economy. Several measures exist for each of these levels. This paper focuses on those used for sector analysis. Since the measures commonly employed for this purpose do not deliver the same results, a better understanding of the underlying causes is necessary. This paper discusses the differences between the various indicators. It identifies the factors leading to disagreement in the results obtained. -- G E R M A N V E R S I O N: In den Assoziierungsabkommen mit der EU haben die mittel- und osteuropäischen Länder ihr Interesse an einer EU-Mitgliedschaft bekundet. Um den Integrationsprozeß zu erleichtern, müssen diese Länder ihre Wirtschaft anpassen. Die Landwirtschaft verdient dabei besondere Aufmerksamkeit, da sie einen nicht geringen Anteil an der gesamten wirtschaftlichen Leistung erbringt. Kenntnis über die Wettbewerbsfähigkeit landwirtschaftlicher Produkte dieser Länder ermöglicht es, die ökonomischen Voraussetzungen für einen möglichst reibungslosen Übergang in die EU zu erreichen. Wettbewerbsfähigkeit läßt sich auf verschiedenen Stufen der Wirtschaft messen; auf betrieblicher Ebene, für einen Sektor oder für die gesamte Volkswirtschaft. Auf jeder dieser Stufen gibt es verschiedene Indikatoren. In diesem Diskussionspapier werden solche Indikatoren beschrieben, die zur Messung der Wettbewerbsfähigkeit auf sektoraler Ebene herangezogen werden können. Da sich die Meßzahlen unterscheiden und auch nicht zwingend die gleichen Ergebnisse liefern, ist die Kenntnis der Gründe für diese Abweichungen in den Ergebnissen sehr wichtig. Dieses Papier untersucht und beschreibt die Faktoren, die zu derartigen Unterschieden führen.

Industry, firm, year, and country effects on profitability: Evidence from a large sample of EU food processing firms

This paper analyzes the variance in accounting profitability within the European food industry. Based on a large panel data set, the variance in return on assets (ROA) is decomposed into year, country, industry, and firm effects. Further on, we include all possible interactions between year, country, and industry and discuss the theoretical foundations for these effects. After singling out the significant effect classes in a nested ANOVA with a thoroughly designed rotation regarding the order of effect introduction, we determine effect magnitude using components of variance (COV). Our results show that firm characteristics seem to be far more important than industry structure in determining the level of economic return within the food industry. Year and country effects, as well as their interactions were weak or insignificant, indicating that macroeconomics and trade theory offer little potential to serve as a basis for the explanation of performance differentials. While neither national nor industry-specific cycles were significant, EU-wide fluctuations significantly contributed to explaining differences in performance, suggesting that economic cycles in the EU are by and large synchronized.variance components, abnormal profit, EU-27, MBV, RBV, comparative advantage, Agribusiness, Agricultural Finance, Financial Economics, Industrial Organization, Marketing,

THE ECONOMIC IMPLICATIONS OF CHEMICAL USE RESTRICTIONS IN AGRICULTURE

Agricultural and Food Policy, Crop Production/Industries,

The Role of Trust in Explaining Food Choice: Combining Choice Experiment and Attribute Best−Worst Scaling

This paper presents empirical findings from a combination of two elicitation techniques—discrete choice experiment (DCE) and best–worst scaling (BWS)—to provide information about the role of consumers’ trust in food choice decisions in the case of credence attributes. The analysis was based on a sample of 459 Taiwanese consumers and focuses on red sweet peppers. DCE data were examined using latent class analysis to investigate the importance and the utility different consumer segments attach to the production method, country of origin, and chemical residue testing. The relevance of attitudinal and trust-based items was identified by BWS using a hierarchical Bayesian mixed logit model and was aggregated to five latent components by means of principal component analysis. Applying a multinomial logit model, participants’ latent class membership (obtained from DCE data) was regressed on the identified attitudinal and trust components, as well as demographic information. Results of the DCE latent class analysis for the product attributes show that four segments may be distinguished. Linking the DCE with the attitudinal dimensions reveals that consumers’ attitude and trust significantly explain class membership and therefore, consumers’ preferences for different credence attributes. Based on our results, we derive recommendations for industry and policy

Can COO Labeling be a Means of Pepper Differentiation: Quality Expectation and Taste Experience

Country of Origin (COO) labeling has been shown in several studies to be an important extrinsic cue for consumers in their quality evaluation of food products such as olive oil. COO has not been discussed in the context of pepper; a spice which’s quality is highly dependant on its heritage. This is the first study that combines face-to-face interviews regarding attitudes, image and knowledge with a bind tasting of pepper and an investigation of consumer's WTP for pepper from different origins and processing characteristics. The study reveals that organic consumes are able to experience taste differences to due COO. They expect taste differences. But also concerned and involved consumers are not to that extent informed about COO that they rely in their purchase decision on COO information. As a result consumers are not willing to pay a significant higher price for COO labeled pepper.Food Consumption/Nutrition/Food Safety,