In this article the stochastic frontier analysis method is used to evaluate the technical efficiency of Hungarian farms before and after accession to the European Union (EU), and to investigate the efficiency determinants. The results show that EU membership has reversed the pre-accession process of efficiency decrease. But the other side of the coin is that access to higher post-accession subsidies contributes to lower efficiency of Hungarian farmers. The other remarkable finding is a seeming scarcity of labour on farms, which constrains their production and efficiency. The Hungarian government may therefore have to design specific national policies if its aim is to promote a farming system that uses labour and at the same time is competitive.
This article investigates farm investment behaviour and the presence of soft budget constraints in the agricultural sectors of three Central and Eastern European countries – Estonia, Hungary and Slovenia – using individual farm accountancy panel data for the 2007–2015 period. Gross farm investment is positively associated with gross farm investment for the previous year, growth in real sales and public investment subsidies. Mixed results for debt square and cash flow variables imply that the different investment behaviour of farms pertains to different structures of investment sources among the countries under analysis. A particularly significant negative cash flow coefficient implies strong soft budget constraints for Estonian farms, while insignificant cash flow coefficients imply weak soft budget constraints for Hungarian and Slovenian farms.
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