Overinvestment in selected Central and Eastern European countries: Production and economic effects.

Farms need to invest in order to earn incomes and maintain their competitive edge. However, the scale and extent of investments must be aligned with resources of other productive inputs, primarily including land, because otherwise there is risk of overinvestment. Since 2004, Central and Eastern European countries have been provided with access to investment support programs; these are non-repayable aid funds which can potentially lead to overinvestment issues. Therefore, this paper attempts to answer the question on the scale of overinvestment in the countries covered. This is all the more important since that problem has rarely been addressed in economic and agricultural research. The study presented in this paper is unique in that the research tasks are based on unpublished Farm Accountancy Data Network (FADN) microdata for 5839 selected Central and Eastern European farms provided by the European Commission's Directorate-General for Agriculture and Rural Development (DG AGRI). Based on variables relating to the amount of productive inputs and production volumes, the authors developed their own typology of farms which includes the following categories: optimum investment levels (the growth rate of labor productivity is greater than growth in the assets-to-land ratio); relative overinvestment (while labor productivity grows, it does so at a slower rate than the assets-to-land ratio); absolute overinvestment (labor productivity declines while the assets-to-land ratio grows); underinvestment (decline in both labor productivity and the assets-to-land ratio). The authors demonstrated that members of the 'absolute overinvestment' group made flagrant mistakes in investment planning and implementation, whereas members of the 'relative overinvestment' group did record an improvement in labor productivity which ultimately can be considered a positive outcome. Underinvested farms were a very small minority in each country. In addition to filling a gap in the methodology for determining agricultural overinvestment, this paper also indicates the scale of that issue in Central and Eastern European countries. This study may be of importance both to farms (as guidelines for investment planning) and to agricultural policymakers who develop investment support programs.

Greenhouse gas emissions intensity of food production systems and its determinants.

It is estimated that about 1/4th of all greenhouse gas (GHG) emissions may be caused by the global food system. Reducing the GHG emissions from food production is a major challenge in the context of the projected growth of the world's population, which is increasing demand for food. In this context, the goal should be to achieve the lowest possible emission intensity of the food production system, understood as the amount of GHG emissions per unit of output. The study aimed to calculate the emission intensity of food production systems and to specify its determinants based on a panel regression model for 14 countries, which accounted for more than 65% of food production in the world between 2000 and 2014. In this article, emission intensity is defined as the amount of GHG emissions per value of global output. Research on the determinants of GHG emissions related to food production is well documented in the literature; however, there is a lack of research on the determinants of the emission intensity ratio for food production. Hence, the original contribution of this paper is the analysis of the determinants of GHG emissions intensity of food production systems. The study found the decreased of emission intensity from an average of more than 0.68 kg of CO2 equivalent per USD 1 worth of food production global output in 2000 to less than 0.46 in 2014. The determinants of emission intensity decrease included the yield of cereals, the use of nitrogen fertilizers, the agriculture material intensity, the Human Development Index, and the share of fossil fuel energy consumption in total energy use. The determinants of growth of emission intensity of food production systems included GDP per capita, population density, nitrogen fertilizer production, utilized agriculture area, share of animal production, and energy use per capita.