The evaluation of the competitive potential and performance of the agricultural sector in the EU countries based on a synthetic index

Abstract

Purpose – This paper presents the results of an assessment of the aggregated competitiveness of the agricultural sector in the EU member states. The authors sought answers to the following questions: What is the general level of competitiveness of the agricultural sector in the European Union? Which countries are leaders in the EU and which are outsiders in this area? Research method – The analyses were based on a set of intentionally selected multi-criteria indicators and taxonomic methods. An aggregated Competitiveness Index (CI) was designed, which allowed evaluating and classifying EU countries into categories in terms of the studied phenomenon. The analysis draws upon data derived from the World Bank’s and Eurostat statistical databases, and the assessment covered two years – 2004 and 2018. Results – The mean CI in 2018 for all the evaluated countries was 0.1701, while in the base year it was 0.1942, which means that in the analysed years the general competitiveness level of agricultural sectors in the EU member states declined. Considering the possible range of CI (0.1), this level was very low in both analysed years. The general competitiveness level fell due to: the reduced use of fertilisers, decrease in the relative export orientation, smaller area of arable land and a decline in employment in agriculture. Originality/value/implications/recommendations – The analysis of the agricultural sector presented in this paper, using a comprehensive index, is the approach that has not been previously applied, taking into account the selection of the components of a comprehensive index, which was made on the basis of the literature studies. The proposed index allowed classifying the countries of the European Union according to both their resources and performance in production and trade in the agricultural sector and comparing the position they occupied in 2004 and in 2018.

How Competitive Is the Agriculture in European Union Member States? An Assessment of Changes over the Past Decade

“…It is difficult to find a direct reference between agricultural competitiveness rankings and other authors' findings, which stems from their varying approaches and different study methods and indicators. For instance, Jarosz-Angowska et al [42], using TOPSIS, demonstrated that in 2018 Romania, the Netherlands, France, and Denmark achieved the highest levels of competitiveness in terms of their agricultural potential. The high competitiveness of such countries (aside from Romania) is undeniable and supported by several studies, regardless of how it is measured [46,47].…”

“…In addition, this ratio illustrates the potential capital productivity, since not all fixed assets are involved in the process of production. In turn, many authors make use of trade measures of competitiveness [31,42]. An argument for assessing competitiveness in this context is that increasing the export volumes of food and other agricultural products opens up new production opportunities for domestic producers [43].…”