Inna Levkovych

Catching Up or Falling Behind in European Agriculture: The Case of Milk Production

The paper explores and analyses the catching up and falling behind processes in the European dairy sector over the period 2004–2011, using a stochastic metafrontier multiple output distance function for 24 EU Member States. The metafrontier estimates reveal considerable productivity differences in milk production across the EU at the regional (NUTS-2) level. Milk yield per cow is the highest in the old Member States, especially in those regions located in the northwest of the EU, while the lowest productivity is observed in Eastern Europe. The same structure was found for both the TFP (Total Factor Productivity) levels and TFP growth. Moreover, the results for technical change suggest that farm sizes are not optimal in many regions in Central and Eastern Europe from a dynamic perspective. The comparative analysis suggests that in the new compared to the old Member States, fewer farms could benefit from the movement of the frontier. Moreover, there are no signs that poorly performing farms are catching up with the best performing farms in the EU regions/countries.

Dairy cooperatives at the crossroads

Purpose – The business environment of the EU dairy sector has altered drastically because of changes in EU agricultural and trade policy, consumer demand, and innovations since the turn of the millennium. This created new market income opportunities for dairy processors, but also fostered the necessity for investments to access these markets. A literature review sees cooperatives to be disadvantaged at this point, because their organisational structure hinders their access to external financial resources. Confronted with these equity constraints, the purpose of this paper is to investigate how German dairy marketing cooperatives adapted to the new business environment and have been performing from 2000 to 2012. Design/methodology/approach – An approach combining descriptive data from public sources and financial ratio analysis was used to test hypotheses, derived from Transaction Cost Theory. Findings – Contrary to assumptions, cooperatives gained market shares on the German dairy market. However, dairy c...

Are We Moving Towards Functioning Agricultural Markets and Trade Relations

We introduce a special feature on the functioning of international agricultural markets. This feature is motivated by the increased interest in the functioning of commodity markets raised by unprecedented price turbulences since 2008, major structural changes through changed roles of emerging economies and related concerns regarding food security. We argue that the delineation of non-functioning markets from markets that adequately adjusted to adverse framework conditions lacks theoretical foundation. We discuss the relevance of some results on institutions for agricultural markets in emerging and transition countries. A synthesis of the articles included in the special feature is provided by highlighting the selection of topics that span a topical range covering price formation on world and domestic markets, market power and trade policy modelling.