Competitiveness of the economy in the context of social policy measures – international perspective

Pełen tekst

(1)Competitiveness of the economy in the context of social policy measures – international perspective.

(2) . . . .

(3) INSTITUTE OF AGRICULTURAL AND FOOD ECONOMICS NATIONAL RESEARCH INSTITUTE. Competitiveness of the economy in the context of social policy measures – international perspective. Editors: prof. dr hab. Andrzej Kowalski dr Marek Wigier. THE POLISH AND THE EU AGRICULTURES 2020+ CHALLENGES, CHANCES, THREATS, PROPOSALS Warsaw 2016.

(4) This monograph has been prepared under the Multi-Annual Programme 2015-2019 “The Polish and the EU agricultures 2020+. Challenges, chances, threats, proposals”. It contains the selected papers which were presented during the conference organized by IAFE-NRI in the days of 22-24 June 2016 in Jachranka, Poland.. The purpose of the publication is to present to the reader the main issues associated with shaping the social policy in the context of competitiveness of agriculture and the food economy at the national and global levels. The publication particularly aims to present problems of the social and economic policy from many viewpoints, taking into account its relations to both measures of the Common Agricultural Policy of the EU and the general global situation.. Reviewer Prof. PhD Gabriel Popescu, The Bucharest University of Economic Studies, Faculty of Agri-Food and Environmental Economics, Bucharest. Proofreader Joanna Gozdera. Technical editor Joanna Gozdera. Cover Project AKME Projekty Sp. z o.o.. ISBN 978-83-7658-633-5. Instytut Ekonomiki Rolnictwa i Gospodarki ywnociowej – Pastwowy Instytut Badawczy ul. witokrzyska 20, 00-002 Warszawa tel.: (22) 50 54 444 faks: (22) 50 54 636 e-mail: dw@ierigz.waw.pl http://www.ierigz.waw.pl.

(5) . 1.

(6) Introduction Dr Marek Wigier 2.

(7) Changes in farm structures from a social aspect in the post-socialist EU Member States since their accession to the EU Dr Norbert Potori, dr Ildikó Tikász, dr Edina Varga, dr Róbert Garay, dr Eszter Hamza, Katalin Rácz, dr Szabolcs Biró 2.1 Introduction 2.2 Methodological issues 2.3 Changes in the number of farms and land use 2.4 Changes in the number of livestock 2.5 Changes in farm labour 2.6 Age structure . 2.7 Gender structure

(8) 2.8 Human capital 2.9 EU support to agriculture 2.10 Conclusions

(9) References

(10). 3. Policy and research needs on economic, social and environmental farm performance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 Dr Hans C.J. Vrolijk 3.1 Introduction

(11) 3.2 Data needs for new topics in policy analysis

(12) 3.3 Collection of farm level indicators of sustainability 3.4 Farm level analysis of sustainability performance . 3.5 Conclusions References 4.

(13) Economic and social context of current social policy in the Czech Republic

(14)

(15) Abstract 4.1 Introduction 4.2 Socioeconomic features of the Czech countryside 4.2.1. Demographic situation .

(16) 4.2.2. Economic situation 4.2.3. Facilities in villages 4.3 Social policy in CR 4.4 Social exclusion and inclusion 4.5 Social innovation and social entrepreneurship 4.6 Conclusions References . 5.

(17) Productivity Growth vs. Farm Support in EU Agriculture – policy implications !

(18) "#$" Abstract 5.1 Introduction 5.2 Productivity and its interaction with policy 5.3 Data and methods 5.4 Productivity growth in the EU agriculture 5.5 Agricultural support vs productivity 5.6 Conclusions . References

(19) 6.

(20) Evaluation of projects from Rural Development Programme in the Czech Republic % !&'! $'() $ Abstract 6.1 Introduction 6.2 Methodology 6.3 Results 6.3.1. RDP Model Calculator 6.3.2. Input data for the model . 6.4 Conclusions

(21) References 7.

(22) Bulgarian Programme for Rural Development (2007-2013): socio-economic outcomes and lessons !* +$ '!*- / $ 0$'!# + # " Abstract 7.1 Introduction – Concept of multifunctionality and CAP reforms after Cork declaration .

(23) 7.2 Multifunctionality in Programme for Rural Development: a framework for analysis 7.3 General characteristics of rural regions of Bulgaria – Need of support for Rural areas in Bulgaria 7.4 Assessment of “Programme for Rural Development of Bulgaria” compared by other new member states 7.5 Competitiveness and Multifunctionality oriented measures 7.6 Outcomes of RDP in Bulgaria 7.7 Lessons and policy recommendation

(24) References 8.

(25) Priorities of sustainable development of agriculture and rural areas within the region of Eastern Serbia * 1! ' 12 Abstract 8.1 Introduction 8.2 Data sources and methodology 8.3 Challenges and opportunities for regional agriculture and rural development 8.4 Recommendations for priority measures to support agriculture and rural development 8.5 Conclusions References 9.

(26) Economic and social aspects of Slovak agri-food sector / " 3 * 34" &+ . 3

(27) + 9.1 Introduction 9.2 Methodological approach . 9.3 Economic-social aspects of agriculture

(28) 9.4 Economic and social aspects of food industry

(29) 9.5 Conclusions References . 10.

(30) The Russian food embargo: impact on the national agri-food sector 5 6 0$ + 10.1 Introduction Concept of Food Security Doctrine

(31) 10.2 External trade and investment ties, production and internal market of agri-food products. .

(32) 10.3 Conclusions References 11.

(33) Food security in Romania – determinants and vulnerabilities &$ 07 ! !8$ 8$! $ (! Abstract 11.1 Introduction 11.2 Methodology . 11.3 Determinants of food security in Romania 11.3.1. Domestic agricultural supply availability and stability 11.3.2. Economic access to food 11.3.3. Food quality and safety 11.4 Strategic priorities for food security and safety within Romania’s development strategy for the next 20 years

(34) References 12.

(35) Economic Assessment of Neonicotinoids’ Use Restriction

(36)

(37) ! +9 0$ + '! 0 +:&' Abstract 12.1 Introduction 12.2 Methodological tools for economic assessment of losses from the restricted use of neonicotinoid pesticides. 12.3 Assessment of missed incomes due to collapsed areas for 2013 and 2015 12.4 Assessment of additional costs, due to collapsed lands from soil pests attacks 12.5

(38)

(39) in conditions of banned nicotinoid pesticides use

(40) 12.6 Conclusions References 13. New Challenges for social and Development Policy – an attempt at a summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 178 Prof. dr hab. Andrzej Kowalski.

(41) Dr Marek Wigier Institute of Agricultural and Food Economics – National Research Institute, Warsaw, Poland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

(42) IDFHG IDFH RU ZLOO IDFH VLPLODU SUREOHPV EXW WKH ZD\ WKH\ VHHN WR VROYH WKHP GLIIHUV,WLVZRUWKEXLOGLQJRQWKHVHH[SHULHQFHV 7KLVSXEOLFDWLRQFRQWDLQVVHOHFWHGSDSHUVGHOLYHUHGLQ(QJOLVKDWDQLQWHUQD WLRQDOFRQIHUHQFHHQWLWOHG&RPSHWLWLYHQHVVRIWKHHFRQRP\LQWKHFRQWH[WRIVRFLDO SROLF\PHDVXUHVKHOGE\WKH,QVWLWXWHRI$JULFXOWXUDODQG)RRG(FRQRPLFV±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iV],OG LNy'U9DUJD(GLQD'U*DUD\5yEHUW'U+DP]D(V]WHU'U5iF].DWDOLQ'U %LUy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

(43) ,QWKHWKLUGFKDSWHU'U+DQV&-9UROLMNIURPWKH/(,:DJHQLQJHQ8QL YHUVLW\WKH1HWKHUODQGVSRLQWVWRWKHQHHGIRUSXUVXLQJSROLF\DQGVFLHQWLILFUH VHDUFK LQ WKH FRQWH[W RI VRFLDO DQG HQYLURQPHQWDO DVSHFWV RI DJULFXOWXUDO KROG LQJV RSHUDWLRQ$JDLQVWWKHEDFNJURXQGRIHFRQRPLFHQYLURQPHQWDODQGWHUULWR ULDO WUDQVIRUPDWLRQV LQ UXUDO GHYHORSPHQW WKH DXWKRU RI WKH SXEOLFDWLRQ SRLQWV RXW WKH QHHG IRU LQWURGXFLQJ QHZ SROLF\ UXOHV VXFK DV SURILWDEOH IRRG SURGXF WLRQVXVWDLQDEOHQDWXUDOUHVRXUFHPDQDJHPHQWDQGVXVWDLQDEOHWHUULWRULDOGHYHO RSPHQW7KHVHUXOHVVHWWDUJHWVIRUQHFHVVDU\UHIRUPVWKDWDUHFUXFLDOIRUDFKLHY LQJKLJKHUFRPSHWLWLYHQHVVEHWWHUVXVWDLQDELOLW\RUKLJKHUHIILFLHQF\ ,QWKHIRXUWKFKDSWHU3URI3K'U,QJ9ČUD0DMHURYiDQG,QJ-LĜt6i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ĜHM 'U 3HFKURYi 0DULH 3URI 'RXFKD7RPiãIURPWKH,QVWLWXWHRI$JULFXOWXUDO(FRQRPLFVDQG,QIRUPDWLRQLQ 3UDJXHWKH&]HFK5HSXEOLFSUHVHQWVRFLRHFRQRPLFHIIHFWVRIWKH5XUDO'HYHO RSPHQW 3URJUDPPH LPSOHPHQWHG LQ LQ WKH &]HFK 5HSXEOLF 7KH FKDSWHUSUHVHQWVPHWKRGRORJLFDODVVXPSWLRQVRIWKHHYDOXDWLRQFRQGXFWHGEDVHG RQWKHGHYHORSHGPRGHO(IIHFWVRIWKH5XUDO'HYHORSPHQW3URJUDPPHLQ%XO JDULDZHUHDOVRDQDO\VHGLQWKHVHYHQWKFKDSWHURIWKLVSXEOLFDWLRQ,WVDXWKRUV LH 3URI -XOLD 'RLWFKLQRYD 3URI ,YDQ .DQFKHY DQG 3URI +ULVWLQD +DUL]DQRYD IURPWKH8QLYHUVLW\RI1DWLRQDODQG:RUOG(FRQRP\LQ6RILDSUHVHQWHGLVVXHV RIWKHPXOWLIXQFWLRQDOLW\RIDUHDGHYHORSPHQWDQGLWVVXSSRUWLQ%XOJDULDEDVHG RQLQVWUXPHQWVRIWKH5'3$JDLQVWWKHEDFNJURXQGRIFKDUDFWHULVWLFV RI QDWXUDO DQG FOLPDWLF FRQGLWLRQV RI %XOJDULDQ DJULFXOWXUH WKH DXWKRUV RI WKH .

(44) FKDSWHUGLVFXVVEDVLFHFRQRPLFDQGVRFLDOLQGLFHVDVVXPSWLRQVDQGDPRXQWVRI H[SHQGLWXUHRQYDULRXVPHDVXUHVDVSDUWRIWKH5'3DQGWKHWUDQVIRUPDWLRQVRE VHUYHG7KH\DOVRSUHVHQWHGREMHFWLYHVDQGDVVXPSWLRQVRIWKH5'3 ,QWKHHLJKWKFKDSWHU3URI-RQHO6XELü'U9HVQD3RSRYLüDQG06F0DU NR-HORþQLNDQDO\VHSULRULWLHVRIVXVWDLQDEOHGHYHORSPHQWRIDJULFXOWXUHDQGUXUDO DUHDVZLWKLQWKHUHJLRQRI(DVWHUQ6HUELD,QWKHSDSHUWKHDXWKRUVDQDO\VHWKH SRWHQWLDOVDQGOLPLWDWLRQVIRUWKHGHYHORSPHQWRIDJULFXOWXUHDQGUHODWHGDFWLYL WLHVLQWKHUHJLRQDVZHOODV H[SODLQHGDOOWKHQHHGVIRUWKHVWDWHLPSURYHPHQW DQGUHFRPPHQGDWLRQVIRUSULRULW\PHDVXUHVWRVXSSRUWDJULFXOWXUHDQGUXUDOGH YHORSPHQW 7KHQLQWKFKDSWHUE\'U6ODYND.UL]RYD(QJ0DULD-DPERURYD(QJ=X ]DQD&KUDVWLQRYD(QJ'DJPDU0DWRVNRYDIURPWKH1DWLRQDO$JULFXOWXUDODQG )RRG&HQWUH±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±DPRQJRWK HUV±KLJKHUSULFHVORZHUSXUFKDVLQJSRZHUKLJKHUH[SHQGLWXUHRQIRRGLQLQ FRPHORZHUSURGXFWTXDOLW\KLJKHUFRQVXPSWLRQQDWXUDOLVDWLRQKLJKHULQIODWLRQ DQGVRFLDOFRQVHTXHQFHVRIWKHVHQHJDWLYHHIIHFWV+RZHYHUWKHDXWKRULQGLFDWHV WKDWWKHHIIHFWVRIWKHHPEDUJRLQWKH5XVVLDQDJULIRRGVHFWRUPD\EULQJSRVL WLYHHIIHFWVVXFKDVWKHGHYHORSPHQWRIGRPHVWLFDJULFXOWXUHDQGWKHIRRGLQGXV WU\ZKLFKVWDUWHGDWWUDFWLQJ$VLDQLQYHVWPHQW 7KHHOHYHQWKFKDSWHUE\'U&HFLOLD$OH[DQGUL'U/XFLDQ/XFD'U0RQ LFD 0LKDHOD 7XGRU IURP WKH ,QVWLWXWH RI $JULFXOWXUDO (FRQRPLFV ± 5RPDQLDQ $FDGHP\UHIHUVWRIRRGVHFXULW\LVVXHVLQ5RPDQLD7KHDQDO\VLVZDVFDUULHGRXW DW WKH PDFUR OHYHO FRXQWU\

(45) DQG WKH PLFUR OHYHO KRXVHKROG DQG SULYDWH FRQ VXPSWLRQ

(46) 7KH DXWKRUV GHWHUPLQHG IRRG VHFXULW\ GLPHQVLRQV LH PHHWLQJ WKH GHPDQGE\GRPHVWLFDJULFXOWXUHVXSSO\VWDELOLW\DGHTXDWHTXDOLW\DQGDYDLODELO .

(47) LW\DWWKHHFRQRPLFOHYHO GHWHUPLQHGE\LQFRPHDQGWKHOHYHORIHFRQRPLFGH YHORSPHQW

(48) $FFRUGLQJWRWKHDXWKRUVVWUDWHJLFSULRULWLHVLQWKHDUHDRIIRRGVH FXULW\ LQ WKH 'HYHORSPHQW 6WUDWHJ\ RI 5RPDQLD IRU WKH QH[W \HDUV LQFOXGH JURZWK LQ FRQVXPSWLRQ LQFOXGLQJ RI SURGXFWV RI ZKLFK 5RPDQLD LV D QHW LP SRUWHUREWDLQLQJIRRGH[SRUWLQJVWDWHVWDWXVDQGLPSURYLQJDFFHVVWRIRRG ,QWKHWZHOIWKFKDSWHU3URI'U'LPLWUH1LNRORYDQG3URI'U0LQND$QD VWDVVRYD&KRSHYDIURPWKH,QVWLWXWHRI$JULFXOWXUDO(FRQRPLFVLQ6RILDSUHVHQW VWXGLHVRQWKH(FRQRPLF$VVHVVPHQWRI1HRQLFRWLQRLGV¶8VH5HVWULFWLRQRQ6XQ IORZHUDQG0DL]H)DUPVLQ%XOJDULDDQGWKHLU5HDFWLRQ%\DQDO\VLQJWKHOHYHO RIFRVWVDQGSULFHVRIJUDLQWKHDXWKRUVVWXG\WKHOHYHORILQFRPHORVV)XUWKHU PRUHWKH\WDNHLQWRDFFRXQWFRVWVUHODWHGWRHJDOWHUQDWLYHSHVWFRQWURORUWKH QHHGIRUUHVRZLQJ7KHSURJUDPPHRIQHRQLFRWLQRLGV XVHUHVWULFWLRQLVWRSUH YHQWEHHSRLVRQLQJDQGLWZDVLPSOHPHQWHGEHFDXVHRIWKHLPSRUWDQFHRIKRQH\ SURGXFWLRQLQDJULFXOWXUDOUHJLRQVRI%XOJDULD 7KHPRQRJUDSKHQGVZLWKDFRQFOXGLQJFKDSWHURQWKHFRPSHWLWLYHQHVVRI WKHHFRQRP\LQWKHFRQWH[WRIVRFLDOSROLF\PHDVXUHVZKLFKEULQJVWRJHWKHUWKH PRVWLPSRUWDQWFRQFOXVLRQVRIWKHSDSHUVSUHVHQWHGLQWKHSUHYLRXVFKDSWHUV7KH SDSHUVHQULFKHGXVZLWKQHZH[SHULHQFHVZLWKNQRZOHGJHRIDQGLQIRUPDWLRQRQ SUREOHPV IDFHG E\ GLIIHUHQW UHJLRQV RI RXU FRQWLQHQW 8QGRXEWHGO\ WKH LP SRUWDQFHRIHFRQRPLFDOO\DQGVRFLDOO\VXVWDLQDEOHGHYHORSPHQWDQGRIWKHEDO DQFHEHWZHHQWKHSURGXFWLRQDQGFRQVXPSWLRQRIVDIHIRRGDQGVRFLDOSROLF\LV DSSUHFLDWHGHYHU\ZKHUHPRUHWKDQEHIRUH7KHSUHVHQWHGSDSHUVJLYHXVDEHWWHU LQVLJKWLQWRPHDVXUHVXQGHUWDNHQLQGLIIHUHQWFRXQWULHVWRPLWLJDWHULVNVIRUHFDVW WUDQVIRUPDWLRQV LQ DJULFXOWXUDO SURGXFWLRQ IRRG SURGXFWLRQ RU GHPRJUDSKLF FKDQJHV:HUHDOLVHWKDWGHVSLWHWKHOHQJWKRIWKHVWXG\ZHGLGQRWDQVZHUDOO TXHVWLRQVUHODWHGWRWKHLVVXHDQDO\VHG2QHWKLQJLVKRZHYHUFHUWDLQ±WKHVXE MHFWRIWKLVSXEOLFDWLRQLVLPSRUWDQWHQRXJKWRUHFRJQLVHWKDWWKHLVVXHVVKRXOGEH VXEMHFWHGWRIXUWKHUUHVHDUFKVXEVWDQWLYHGLVFXVVLRQVDQGFRQFOXVLRQVVKRXOGEH FRPPXQLFDWHG WR WKH SXEOLF WKH DGPLQLVWUDWLRQ DQG SROLWLFLDQV :H WKXV OHDYH RXUVHOYHV WKH SRVVLELOLW\ WR IXUWKHU GLVFXVV WKH VXEMHFW UHIHUUHG WR DERYH 7KH PXOWLDQQXDO SURJUDPPH HQWLWOHG 7KH 3ROLVK DQG WKH (8 DJULFXOWXUHV &KDOOHQJHV FKDQFHV WKUHDWV SURSRVDOV LPSOHPHQWHG LQ E\ WKH,Q VWLWXWHRI$JULFXOWXUDODQG)RRG(FRQRPLFV±1DWLRQDO5HVHDUFK,QVWLWXWHRIIHUV XV VXFK D FKDQFH :H ZLOO IXUWKHU GLVFXVV WKH VXEMHFW DW VHPLQDUV DQG FRQIHU HQFHV KHOG E\ WKH ,QVWLWXWH DV ZHOO DV LQ WKH SXEOLVKLQJ VHULHV RI 0XOWLDQQXDO 3URJUDPPH 0RQRJUDSKV :H WKXV HQFRXUDJH DOO UHDGHUV WR PRQLWRU UHVXOWV RI RXU VFLHQWLILFUHVHDUFK DQG GHOLEHUDWLRQVYLD DPRQJ RWKHUV WKH ,QVWLWXWH V ZHE VLWHZZZLHULJ]ZDZSO. .

(49) Dr Norbert Potori, dr Ildikó Tikász, dr Edina Varga, dr Róbert Garay, dr Eszter Hamza, Rácz Katalin, dr Szabolcs Biró Research Institute of Agricultural Economics, Budapest, Hungary. &KDQJHVLQIDUPVWUXFWXUHVIURPDVRFLDODVSHFWLQWKH SRVWVRFLDOLVW(80HPEHU6WDWHVVLQFHWKHLUDFFHVVLRQWRWKH(8 ,QWURGXFWLRQ 6WUXFWXUDO FKDQJH LQ WKH DJULFXOWXUDO VHFWRU RI WKH (XURSHDQ 8QLRQ (8

(50) EURDGO\WUHQGVWRZDUGVIHZHUODUJHUDQGPRUHFDSLWDOLQWHQVLYHIDUPVDQGDGH FOLQLQJ IDUPLQJ SRSXODWLRQ RI DQ LQFUHDVLQJ DYHUDJH DJH 6WUXFWXUDO FKDQJH KRZHYHULVDFRPSOH[SKHQRPHQRQZKLFKRFFXUVDWDGLIIHUHQWSDFHDFURVVWKH UHJLRQVRIWKH(8>(&D@ 7KHRUJDQLVDWLRQVL]HDQGVSHFLDOLVDWLRQVRIDJULFXOWXUDOKROGLQJVDVZHOO DVWKHLUPL[RISURGXFWLRQIDFWRUVDUHLPSRUWDQWSDUDPHWHUVIRUWKHGHVLJQLQJRI IXWXUH SROLFLHV WKHUHIRUH XQGHUVWDQGLQJ WKHLU GHYHORSPHQW LV RI FRUH LP SRUWDQFH7KHDLPRIWKLVSDSHULVWREULHIO\DQDO\VHWKHFKDQJHVLQIDUPVWUXF WXUHVLQWKHSRVWVRFLDOLVW&HQWUDODQG(DVWHUQ0HPEHU6WDWHV 06¶V

(51) RIWKH(8 (8

(52) WKURXJKWKHSHULRGVLQFHWKHLUDFFHVVLRQWRWKH(8IURPDVRFLDODV SHFW)RUWKHDQDO\VLV(85267$7GDWDEDVHVZHUHXVHGH[WHQVLYHO\7UHQGVLQ IDUP VWUXFWXUHV KDYH EHHQ SUHVHQWHG PDLQO\ WKURXJK WKH FKDQJHV LQ &RPPRQ $JULFXOWXUDO3ROLF\ &$3

(53) FRQWH[WLQGLFDWRUVUHWULHYHGIURPWKHDQG )DUP 6WUXFWXUH 6XUYH\ )66

(54) GDWDEDVHV 7KUHH EDVLF SK\VLFDO DQG HFRQRPLF VL]HFDWHJRULHVRIDJULFXOWXUDOKROGLQJVKDYHEHHQGHILQHGDQGXVHGZKLFKFRU UHVSRQGWRWKHIDUPVWUXFWXUHLQGLFDWRUVGHILQHGE\WKH(XURSHDQ&RPPLVVLRQ (&

(55) 7KH)66KDVLPSRUWDQWOLPLWDWLRQVERWKDWWKHFRXQWU\DQGWKH DJJUHJDW HG OHYHO ZKLFK KDYH EHHQ WDNHQ LQWR DFFRXQW DV IDU DV SRVVLEOH LQ RUGHU WR DYRLGPLVLQWHUSUHWDWLRQV 7KLVSDSHULVEDVHGRQDVWXG\SUHSDUHGIRUWKH $*5,&RPPLWWHHRIWKH (XURSHDQ3DUOLDPHQW>%LUyet al@ . 7KH(8FRPSULVHVRI%XOJDULDWKH&]HFK5HSXEOLF(VWRQLD+XQJDU\/DWYLD/LWKXDQLD 3RODQG5RPDQLD6ORYDNLDDQG6ORYHQLD7KXVWKH(8GLIIHUVIURPWKH(8 WKHFODVVL FDOW\SRORJ\IRUWKHµQHZ¶06¶VXQWLOWKHDFFHVVLRQRI&URDWLD

(56) LQWKDWLWH[FOXGHV&\SUXVDQG 0DOWDZKLFKGRQRWEHORQJWRWKHSRVWVRFLDOLVW&HQWUDODQG(DVWHUQ(XURSHDQEORFNRI06¶V. .

(57) 0HWKRGRORJLFDOLVVXHV 7KH )66 KDV OLPLWDWLRQV ZKLFK GHVHUYHFDUHIXO DWWHQWLRQ )RU HDFK FRXQ WU\WKH)66GDWDEDVHFRQWDLQVSURMHFWLRQVIURPDUHSUHVHQWDWLYHVDPSOHWRKROG LQJVDERYHVSHFLILFSK\VLFDOWKUHVKROGV DUHDDQGQXPEHURIOLYHVWRFNVSHFLHV

(58) WKHUHIRUH WKH )66 GDWD PD\ QRW PLUURU UHDOOLIH DJULFXOWXUDO DFWLYLWLHV HQWLUHO\ 7KHVHOHFWLRQRIWKHUHSUHVHQWDWLYHVDPSOHVIRUWKH)66LVEDVHGRQWKHSUHFHG LQJ$JULFXOWXUDO&HQVXV IXOOVFDOHVXUYH\

(59) 7KHORQJHUWKHWLPHJDSEHWZHHQWKH &HQVXVDQGWKH)66WKHOHVVUHSUHVHQWDWLYHWKHVDPSOHPD\EH 7KHSK\VLFDOWKUHVKROGVKDYHQRWUHPDLQHGFRQVWDQWRYHUWKHSDVWGHFDGH $FFRUGLQJWR(XURVWDW>@WKHFRYHUDJHRIWKH)66ZDVFKDQJHGIURPRI WKH6WDQGDUG*URVV0DUJLQ 6*0

(60) EHIRUHWRRIWKH8$$DQG RIWKHOLYHVWRFNIURPRQZDUG3DUDOOHOWRWKLVQHZDQGPRUHGHWDLOHGSK\V LFDO WKUHVKROGV ZHUH GHILQHG LQ $QQH[ ,, RI 5HJXODWLRQ (&

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

(62) $QRWKHUFKDQJHLQWKH)66PHWKRGRORJ\LQZKLFKEHDUVLPSRUWDQFH IRUWKHDQDO\VLVZDVWKDWGDWDRQFRPPRQODQGZHUHFROOHFWHGIURPDOO(806¶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¶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et al.>@WKHUHDVRQVIRUTXLW WLQJ DJULFXOWXUH LQFOXGH OLPLWHG DFFHVV WR WKH PDUNHW ZHDN EDUJDLQLQJ SRZHU KLJK WUDQVDFWLRQ FRVWV DQG WKH XQZLOOLQJQHVV WR FRRSHUDWH :KLOH WKH SK\VLFDO WKUHVKROGVRIWKH)66UHPDLQHGXQFKDQJHGEHWZHHQDQGIDUPQXP EHUV LQ WKH (8 DV ZKROH VKRZHG RQO\ DQ GHFOLQH YHUVXV LQ WKH (81RWZLWKVWDQGLQJWKHFDVHRI%XOJDULDWKLVSKHQRPHQRQFDQEHH[SODLQHG LQSDUWE\WKHIHZHUDOWHUQDWLYHHPSOR\PHQWRSSRUWXQLWLHVLQPDQ\RIWKHUXUDO DUHDVRISRVWVRFLDOLVWFRXQWULHV>6ZLQQHQet al.@ . &RPPRQODQGLVWKH8$$RQZKLFKDOWKRXJKPDQDJHGE\DQDJULFXOWXUDOKROGLQJFRPPRQ ULJKWVDSSO\&RPPRQODQGFDQFRQVLVWRISDVWXUHKRUWLFXOWXUDORURWKHUODQG .

(63) $OWKRXJKWKHWRWDO8$$PDQDJHGE\)66IDUPVUHPDLQHGDOPRVWVWDEOHLQ WKH (8 EHWZHHQ DQG LQ WKH (8 LW LQFUHDVHG E\ GXULQJ WKLVSHULRG7KLVZDVSULPDULO\GULYHQE\LQFUHDVHVLQWKH)668$$LQ%XOJDULD

(64) DOUHDG\ H[SODLQHG LQ (VWRQLD

(65) DQG /DWYLD

(66) ZKHUH GH PDQGIRUDJULFXOWXUDOODQGLQWHQVLILHGDIWHU(8DFFHVVLRQLQUHVSRQVHWRWKHLQ WURGXFWLRQ RI WKH &$3 LQ SDUWLFXODU RI GLUHFW VXSSRUW ZKLFK DOVR DWWUDFWHG IRU HLJQ LQYHVWRUV LQ WKH %DOWLF FRXQWULHV DQG LQ +XQJDU\ ZKHUH WKH LQFUHDVH LQ 8$$ZDV

(67) +RZHYHULQWKHFDVHRIWKHODWWHUWKLVJURZWKZDVRYHUZKHOP LQJO\GXHWRWKHLQFOXVLRQRI8$$LQWKH)66ZKLFKFRXOGQRWEHLGHQWLILHGZLWK IDUPVEHIRUH,WVKRXOGEHQRWHGWKDWLQ%XOJDULDWKH WRWDO8$$PDQDJHG E\)66IDUPVLQFUHDVHGE\RQO\EHWZHHQDQGDPRGHUDWHDQG PRUHUHDOLVWLFFKDQJHZKLFKFDQEHH[SODLQHGE\ODQGRIYHU\VPDOOIDUPVH[ FOXGHGIURPWKH6XUYH\VFHDVLQJWRH[LVWDQGWDNHQRYHUSULPDULO\E\ODUJHWHQ DQWIDUPVVSHFLDOLVHGPDLQO\LQFHUHDOVDQGRLOVHHGVSURGXFWLRQ ,QWKH(8RIWKH8$$ZDVPDQDJHGE\ODUJHIDUPV ZLWKPRUH WKDQKHFWDUHV

(68) DQGE\VPDOO ZLWKOHVVWKDQKHFWDUHV

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

(70) $JDLQWKH%DOWLFFRXQWULHVGHVHUYHVSHFLDODWWHQWLRQGXH WRWKHIDUDERYHDYHUDJHGURSLQWKHVKDUH RIPHGLXPVL]HGIDUPVLQPDQDJLQJ 8$$)RULQVWDQFHLQWKHFDVHRI/LWKXDQLD0HOQLNLHQHDQG9RONRY>@H[ SODLQWKLVWUHQGE\ODUJHIDUPVEHFRPLQJILQDQFLDOO\VWURQJHUFRPSDUHGWRPHGL XPVL]HGIDUPVGXHWR&$3GLUHFWVXSSRUWZKLFKHQDEOHGWKHVHWRLQYHVW PRUH LQWR PRGHUQLVLQJ SURGXFWLRQ WHFKQRORJLHV DQG WR H[SDQG E\ EX\LQJ RU OHDVLQJ ODQG ,Q FRQWUDVW WR WKH %DOWLF FRXQWULHV LQ %XOJDULD DQG 5RPDQLD LW ZDV WKH VKDUHRIVPDOOIDUPVWKDWGHFOLQHGDERYHDYHUDJH5RPDQLDZKHUHQRSK\VLFDO WKUHVKROGVZHUHDSSOLHGIRUWKH)66GHVHUYHVSDUWLFXODUDWWHQWLRQLQWKLVUHVSHFW WKH8$$PDQDJHGE\5RPDQLDQVPDOOIDUPVGURSSHGE\DOPRVWPLOOLRQKHF WDUHVRUEHWZHHQDQGSDUDOOHOWRWKHGLVDSSHDUDQFHRIDOPRVW WKRXVDQGVXFKKROGLQJV . .

(71) &KDQJHVLQWKHQXPEHURIOLYHVWRFN $FFRUGLQJWR)66GDWDWKHUHZHUHRYHUPLOOLRQOLYHVWRFNLQWKH (8 H[SUHVVHG LQ OLYHVWRFN XQLWV /68

(72) OHVV WKDQ LQ 2I WKHVH ZHUH KHOG RQ IDUPV LQ WKH (8 ZKLOH IDUPHUV LQ WKH (8 KHOG WKH UHPDLQGHU)URPWRWKHFXPXODWHGQXPEHURIOLYHVWRFNLQWKH(8 GURSSHGE\DQGLQWKH(8E\6LQFHWKH8$$UHPDLQHGDERXW WKHVDPHWKHOLYHVWRFNGHQVLW\JDSEHWZHHQWKHVHWZRJURXSVRI06¶VZLGHQHG RYHUWKHSHULRGWKHGHQVLW\LQGH[IRUWKH(8GHFUHDVHGIURPLQWR /68KHFWDUH LQ ZKLOH WKDW RI WKH (8 ZDV GRZQ E\ MXVW WR /68KHFWDUH 7KHVHILJXUHVLQGLFDWHWKDWWKHOLYHVWRFNVHFWRURIWKH(8ZDVLPSDFWHG E\(8DFFHVVLRQDQGGDWDREWDLQHGIURPWKHHFRQRPLFDFFRXQWVIRUDJULFXOWXUH ($$

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¶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¶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

(74) LQ 6ORYDNLD DQG LQ %XOJDULD WKH UHJLVWHU RI OLYHVWRFN KROGHUV ZDV UHGXFHG E\ DQGUHVSHFWLYHO\DQGLWZDVKDOYHGLQWKH%DOWLF6WDWHVDQGLQ3R ODQG 7KH VKDUH RI ODUJH IDUPV ZLWK PRUH WKDQ KHFWDUHV 8$$ LQFUHDVHG LQ OLYHVWRFN QXPEHUV LQ DOPRVW HYHU\ (8 06 PDLQO\ DW WKH H[SHQVH RI VPDOO IDUPVZLWKOHVVWKDQKHFWDUHVRI8$$H[FHSWIRUWKH&]HFK5HSXEOLFDQG6OR YDNLDZKHUHWKHVKDUHRIODUJHIDUPVZDVZD\DERYHWKH(8DYHUDJHDOUHDG\ LQ . &KDQJHVLQIDUPODERXU. ,Q WKH (8 WKH HTXLYDOHQW RI PLOOLRQ SHRSOH H[SUHVVHG LQ $:8

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

(76) $FFRUGLQJ WR WKH GDWD RI WKH (FRQRPLF $FFRXQWV RI $JULFXOWXUH ($$

(77) WKHVKDUHRIVDODULHGODERXULQSXWLQWKHDJULFXOWXUDOODERXUIRUFHZDVLQ WKH(8DQGLQWKH(8LQ7KHORQJWHUPWUHQGLVWKDWODERXU XVHLQDJULFXOWXUHLVGHFOLQLQJDFURVVWKH(8KRZHYHUWKHXVHRIVDODULHGODERXU LVGHFUHDVLQJPRUHVORZO\WKDQQRQVDODULHGODERXUDQGLWVVKDUHLQWKHWRWDOOD ERXULQSXWLVWKHUHIRUHLQFUHDVLQJ $PRQJWKH(806¶VWKHUHDUHVXEVWDQWLDOGLIIHUHQFHVLQWKHVKDUHVRI VDODULHG DQG QRQVDODULHG ODERXU LQSXWV LQ WKH DJULFXOWXUDO ODERXU IRUFH ,Q WKH &]HFK5HSXEOLFDQG6ORYDNLDWKHVKDUHRIVDODULHGODERXULQSXWZDVRYHULQ ZKLOHLQ3RODQGDQG6ORYHQLDLWZDVOHVVWKDQ (8DJULFXOWXUHLVGRPLQDWHGE\IDPLO\IDUPVZKHUHIDPLO\ODERXUUHS UHVHQWHGRIWKHWRWDOUHJXODUODERXUIRUFHLQDJULFXOWXUHLQFRPSDUHG WR LQ WKH (8 7KH IDPLO\ ODERXU IRUFH DOVR H[SUHVVHG LQ $:8

(78) GH FUHDVHGE\RQDYHUDJHLQWKH(8GXULQJWKHSHULRGDQGE\ LQWKH(8DWWKHVDPHWLPH7KLVFDQEHH[SODLQHGE\WKHGURSLQWKH QXPEHURIVROHKROGHUV¶KROGLQJV±WKHPDLQHPSOR\HURIWKHIDPLO\ODERXUIRUFH LQDJULFXOWXUH±SDUWLDOO\GXHDJDLQWRWKHFKDQJHVLQWKH)66WKUHVKROGV. .

(79) ,QWKH(8RIWKHIDPLO\ODERXUIRUFHLQDJULFXOWXUHZRUNHGRQ PHGLXPVL]HG IDUPV DQG RQ IDUPV XS WR KHFWDUHV 8$$ LQ %\ FRQWUDVWLQWKH(8WKHVKDUHRIWKHIDPLO\ODERXUIRUFHLQDJULFXOWXUHZRUNLQJ RQ VPDOO IDUPV ZDV FRPSDUHG WR IRU PHGLXPVL]HG IDUPV 06¶V ZKHUHWKHIDPLO\IDUPODERXUZDVHPSOR\HGSUHGRPLQDQWO\RQVPDOOIDUPVZHUH %XOJDULD

(80) 5RPDQLD

(81) +XQJDU\

(82) DQG 6ORYDNLD

(83) ZKLOH WKH VDPH KROGV WUXH IRU PHGLXPVL]HG IDUPV LQ /DWYLD

(84) (VWRQLD

(85) DQGWKH&]HFK5HSXEOLF

(86) ,QWKH&]HFK5HSXEOLFIDUPVRYHU KHFWDUHV 8$$ ZHUH WKH VHFRQG ODUJHVW HPSOR\HU RI WKH IDPLO\ ODERXU IRUFH LQ DJULFXOWXUH

(87) LQ ,Q WKH (8 WKH SURSRUWLRQ RI WKH IDPLO\ ODERXU IRUFHLQ DJULFXOWXUHJUHZE\ SRLQWVRQ PHGLXPVL]HG IDUPV DQG E\ SRLQWVRQODUJHIDUPVEHWZHHQDQG7KHPRVWVLJQLILFDQWFKDQJHVRF FXUUHGLQWKH&]HFK5HSXEOLFDQG6ORYDNLDLQHDFKRIWKHGLIIHUHQWVL]HFDWHJR ULHVZKLFKFDQQRWEHLQWHUSUHWHGDVWKHGLUHFWLPSDFWRIWKHFKDQJHLQWKUHVKROGV VLJQLILFDQWO\DIIHFWVWKHUHVXOWVRIODERXUIRUFHLQDJULFXOWXUHLQERWKFRXQWULHV. . $JHVWUXFWXUH 7KH UHVWUXFWXULQJ RI DJULFXOWXUH KDV EHHQ ODUJHO\ LQIOXHQFHG E\ GHPR JUDSKLF WUHQGV RI ZKLFK RQH EHDULQJ SDUWLFXODU LPSRUWDQFH LV WKH UHGXFWLRQ LQ WKH DJULFXOWXUDO ZRUNIRUFH RI DFWLYH DJH JURXS DV D UHVXOW RI OLIHVW\OH FKDQJHV PLJUDWLRQ DQG DJHLQJ >&KDYDV @ 0DMRU FRQVHTXHQFHV RI WKH UHGXFWLRQ RI WKH SRWHQWLDO ODERXU IRUFH VXSSO\ DUH PHFKDQLVDWLRQ VXEVWLWXWLQJ PDQXDO ZRUN DVKLIWWRDQH[WHQVLYHSURGXFWLRQVWUXFWXUHDQGWKHVLPSOLILFDWLRQRIWKHSURGXFW VWUXFWXUH>0|OOHUVet al.@ $PDMRUGULYHURIWKHJURZWKRIIDUPVL]HLVWKHORQJWHUPRSSRUWXQLW\WR KDQGRYHUDQGRSHUDWHDFFXPXODWHGUHVRXUFHV:KHQWKHSUREOHPVRIWKHUHSOHQ LVKPHQW RI ODERXU IRUFH DQG IDUP VXFFHVVLRQ DUH WDFNOHG WKH OLNHOLKRRG RI WKH LPSOHPHQWDWLRQ RI ORQJWHUP ODUJHVFDOH LQYHVWPHQWV LQFUHDVHV >=DJDWD DQG /RVWDN @ <RXQJ IDUPHUV DUH PRUH RSHQ WR LQQRYDWLRQ DQG WKH\ SD\ PRUH DWWHQWLRQ WR WKH VXVWDLQDEOH XVH RI QDWXUDO UHVRXUFHV )RU H[DPSOH .XFLĔVND et al.>@GUDZDWWHQWLRQWRWKHIDFWWKDW\RXQJVNLOOHG3ROLVKIDUPHUVDUHPRUH OLNHO\WRMRLQHQYLURQPHQWSURWHFWLRQSURJUDPPHVDQGWRVKLIWWRRUJDQLFIDUP LQJWKDQHOGHUO\IDUPHUV7KHSURFHVVRIFRQFHQWUDWLRQLQODQGXVHDVZHOODVWKH UHWLUHPHQWRIHOGHUO\IDUPHUVPD\LPSURYHWKHRSSRUWXQLWLHVIRU\RXQJIDUPHUV WRGHYHORSDQGWRUHPDLQLQDJULFXOWXUH=LPPHUPDQQ>@FRQILUPVWKDWWKH FKDQFHRIWKHGLVSRVDORIVPDOOHUIDUPVZLWKIDUPPDQDJHUVDJHGRYHUDUHWKH KLJKHVWZKLFKSURYLGHVSURVSHFWVRIJURZWKIRUWKHUHPDLQLQJIDUPV. .

(88) 7KHNH\IDFWRUVVORZLQJGRZQFKDQJHVLQWKHDJHSURILOHRIWKHDJULFXOWXU DOSRSXODWLRQDUHOLPLWHGDFFHVVWRSURGXFWLRQUHVRXUFHV ODQGFDSLWDOHWF

(89) DQG WKHKLJK WUDQVDFWLRQDO FRVWV RI IDUP KDQGRYHU >6ZLQQHQ DQG .QRSV @ 'H PRJUDSKLF UHQHZDO LQ WKH (8 LV DOVR KLQGHUHG E\ ORZ ZDJHV DQG WKH ORZ SUHVWLJH RI DJULFXOWXUDO MREV LQ DFFRUGDQFH ZLWK FKDQJLQJ OLIHVW\OHV WKH ORZ VWDQGDUGRIOLYLQJLQPDQ\UXUDODUHDVDQGWKHSUREOHPDWLFDFFHVVWREDVLFEXVL QHVVVHUYLFHV>6]pNHO\@7KHSDFHRIJHQHUDWLRQVKLIWFDQEHLQIOXHQFHGE\ YDULDEOHV VXFK DV WKH KHDOWK RI IDUP PDQDJHUV DQG WKH H[SHFWHG DPRXQW RI WKH UHWLUHPHQWSHQVLRQSURIHVVLRQDOTXDOLILFDWLRQVRIWKHSRWHQWLDOVXFFHVVRUVPDUL WDO VWDWXV DQG WUDGLWLRQV RI IDUPLQJ ZLWKLQ WKH IDPLO\ >7LHWMH 5RVVLHU @,QDGGLWLRQWKHGHPRJUDSKLFUHQHZDORIDJULFXOWXUDOVRFLHW\LQWKH(8 LVGHOD\HGRZLQJWRUHVWULFWHGRSSRUWXQLWLHVIRULQFRPHJHQHUDWLRQLQUXUDODUHDV DODFNRIMREVDQGZDJHVEHORZWKH(8DYHUDJH>'DYLGRYDet al.@ $FFRUGLQJ WR )66 GDWD WKH DJH VWUXFWXUH RI IDUP PDQDJHUV LQ WKH (8 IROORZHG WKH WUHQGV FKDUDFWHULVWLF RI WKH (8 LQ WKH FDVH RI WKH WZR H[WUHPH FDWHJRULHV WKH PDQDJHUV RI RI WKH IDUPV ZHUH RYHU \HDUV RI DJHZKLOHWKHVKDUHRI\RXQJPDQDJHUVXQGHUWKHDJHRIZDV ,Q WKH (8 3ROLVK IDUPHUV KDG WKH PRVW IDYRXUDEOH DJH VWUXFWXUH DV RIIDUPPDQDJHUVZHUHXQGHUWKHDJHRILQ

(90) 7KHSURSRUWLRQRI \RXQJIDUPPDQDJHUVDOVRH[FHHGHGWKH(8DYHUDJHLQ6ORYDNLDDQG(VWRQLD DQG UHVSHFWLYHO\

(91) ,Q 3RODQG WKH VKDUH RI RWKHU DFWLYH DJH JURXSV \RXQJHUWKDQ

(92) LVKLJKHUWKDQWKH(8DYHUDJHZKLOHWKHSURSRUWLRQRIWKH DJHJURXSRYHU\HDUVPDNHVXSRQO\RIDOOIDUPHUVLQWKLVFRXQWU\ 7KH PRVW HOGHUO\ DERYH WKH DJH RI

(93) IDUP PDQDJHUV DUH LQ 5RPDQLD

(94) %XOJDULD

(95) DQG /LWKXDQLD

(96) ZKHUH VPDOO IDUP XQLWV DUH GRPLQDQW DQG UHODWLYHO\ ORZ RU QR VXUYH\ WKUHVKROGV DUH DSSOLHG 7KH UDWH RI \RXQJ XQGHU\HDUV

(97) IDUPHUVLQDOORIWKHVH06¶VLVORZHUWKDQWKH(8DY HUDJH 5RPDQLD%XOJDULD/DWYLD

(98) 5HJDUGLQJWKH(8DV DZKROHIDUPHUVPDQDJLQJOHVVWKDQKHFWDUHV8$$SUHGRPLQDWHDPRQJIDUP PDQDJHUVERWKRIWKHROGHVWDQGWKH\RXQJHVWDJHJURXSV,QWKH(8RI WKRVH\RXQJHUWKDQDQGRIWKHDJHJURXSRYHU\HDUVZHUHFXOWLYDW LQJ OHVV WKDQ KHFWDUHV LQ FRQWUDVW WR WKH (8 ZKHUH WKH VKDUHV DUH RQO\ DQGUHVSHFWLYHO\ 7DEOH

(99) . . $EDQGRQPHQWRIIDUPLQJE\WKRVHRYHU\HDUVFDQKDYHDVLJQLILFDQWLPSDFWRQWKHIDUP VWUXFWXUHVFKDQJHLQWKHVKRUWWHUPWKHUHIRUHHPSKDVLVZDVSODFHGRQWKHFKDUDFWHULVDWLRQRI WKLVDJHJURXS .

(100) 7DEOH'LVWULEXWLRQRIIDUPPDQDJHUVE\DJHDQG8$$ 3K\VLFDOIDUP VL]H KD

(101) . \HDUV. !\HDUV. \HDUV. (8 (8 (8 (8 (8 (8 (8 (8 (8 thousand. . . . . !. . . . . . . . . . . . . . . . . . . . . . . 7RWDO. . !. . rate (%). . . . . . . . . . !. . . . . . . . . !. . . . . . . . . 7RWDO. . . . . . . . . Source: EUROSTAT [n.d.].. $OWKRXJKLQWKHGLVWULEXWLRQRIWKHDJHVWUXFWXUHRIIDUPPDQDJHUVQRVLJ QLILFDQWFKDQJHVFDQEHREVHUYHGLQWKHSHULRG±WKHODQGXVHFKDUDF WHULVWLFVLQWKHGLIIHUHQWDJHJURXSVKDYHFKDQJHG7KHQXPEHURIIDUPHUVXQGHU GHFOLQHG E\ WZRWKLUGV WR IRU H[DPSOH LQ 5RPDQLD LQ WKH H[DPLQHG SHULRGZKLOHDPRQJWKHPWKHQXPEHURIODQGXVHUVZLWKRYHUKHFWDUHVKDV PXOWLSOLHG,QDGGLWLRQWRWKH5'PHDVXUHVZKLFKSUHIHUWKH\RXQJSHRSOHQD WLRQDO SURJUDPV µFermierul’ / The farmer program, Life annuity program

(102) SUREDEO\IDFLOLWDWHGWKLVSURFHVVWRR>/XFD@ %HWZHHQ DQG 6ORYDNLD 3RODQG DQG %XOJDULD KDG WKH KLJKHVW SURSRUWLRQVDPRQJWKH(8RIIDUPPDQDJHUVTXLWWLQJIDUPLQJDERYHWKHDJH RI7KHVKDUHRIIDUPHUVEHORQJLQJWRWKHROGHVWDJHJURXSGURSSHGWR LQ6ORYDNLDLQ3RODQGDQGLQ%XOJDULD&RQVLGHULQJWKHFKDUDFWHU LVWLFV RI WKH DJH VWUXFWXUH RI IDUP PDQDJHUV LQ LW EHFRPHV HYLGHQW WKDW VWUXFWXUDOFKDQJHVUHODWHGWRWKHGHFLVLRQRIIDUPPDQDJHUVWRJLYHXSIDUPLQJ DERYH WKH DJH RI FDQ EH DQWLFLSDWHG LQ 5RPDQLD %XOJDULD DQG /LWKXDQLD ZKHUHWKLVVWUDWDRIIDUPHUVDFFRXQWHGIRUDQGRIWKHWRWDO ODERXUIRUFHNHSWDQGRIWKHWRWDOOLYHVWRFNDQGFXOWLYDWHG DQGRIWKHWRWDO8$$UHVSHFWLYHO\ 6XEVLGLHV SOD\ D FRPSOH[ UROH LQ JHQHUDWLRQ FKDQJH >=DJDWD DQG /RVWDN @ 2QH RI WKH LPSDFWV RI LQWURGXFLQJ (8 GLUHFW SD\PHQWV ZDV WKDW HOGHUO\ IDUPHUV GLG QRW TXLW WKH VHFWRU DV WKH\ PDGH D SRVLWLYH LPSDFW RQ DJULFXOWXUDO .

(103) LQFRPHV DQG WKH LPSURYHPHQW RI FKDQFHV RI DFFHVV WR DJULFXOWXUDO ORDQV

(104) 0HDQZKLOH D KLJK QXPEHU RI QHZ HQWUDQWV HQWHUHG WKH VHFWRU ZLWK WKH KHOS RI WKH\RXQJIDUPHUSD\PHQWSURYLGHGZLWKLQ3LOODU,,RIWKH&$3 \HWLWKDVWREH QRWHG WKDW VRPH RI WKHP ZHUH QRW DFWXDO QHZ HQWUDQWV EXW VXFK \RXQJ IDPLO\ PHPEHUVZKRIRUPHUO\KDGEHHQHQJDJHGLQDJULFXOWXUDODFWLYLW\

(105) (DUO\UHWLUH PHQWVFKHPHVZHUHQRWHIILFLHQWHQRXJKLQVHYHUDO(806¶VDQGLWSULPDULO\ DFWXDWHG WKH KDQGRYHU RI IDUPV E\ VXFK IDUPHUV ZKR LQWHQGHG WR TXLW IDUPLQJ DQ\ZD\LUUHVSHFWLYHRIVXEVLGLHV . *HQGHUVWUXFWXUH. :RPHQ DUH LPSRUWDQW GULYHUV RI VWUXFWXUDO FKDQJH LQ DJULFXOWXUH DV WKH\ DUHPRUHRSHQWRLQQRYDWLRQLQWURGXFWLRQRIQHZPHWKRGVRISURGXFWLRQWHFK QRORJLHVDQGSURGXFWVEHVLGHVZKLFKWKH\WDNHPRUHLQLWLDWLYHLQFUHDWLQJSDUW QHUVKLSV SURPRWLQJ 5' DQG DFFHVV WR PDUNHWV >)UDQLü @ 7KH UROH RI UXUDO ZRPHQLVGHWHUPLQDWLYHLQWKHGLYHUVLILFDWLRQRIDFWLYLWLHVIDFLOLWDWLQJDEDODQFHG XVH RI WKH ODERXU IRUFH DQG WKH H[WHQVLRQ RI LQFRPH JHQHUDWLQJ RSSRUWXQLWLHV HJDJULWRXULVPDFWLYLWLHVSURGXFWLRQRIKDQGPDGHJRRGV

(106) DVZHOODVVHUYLFHV DYDLODEOHLQUXUDOVSDFH>(&@ $OWKRXJKLQWKH(8VLPLODUO\WRWKHZKROH(8WKHPDMRULW\RIIDUP PDQDJHUVDUHPHQWKHSURSRUWLRQRIIHPDOHIDUPPDQDJHUVLVUHPDUNDEO\KLJKHU WKDQLQWKH(8 FI

(107) HVSHFLDOO\DPRQJSHRSOHDJHGRYHU\HDUV FI

(108) UHIOHFWLQJWKHODFNRIUXUDOMREVRULQFRPHJHQHUDWLQJRSSRUWXQL WLHV 5HJDUGLQJ WKH VSHFLILF VLWXDWLRQV ZLWKLQ WKH 06¶V WKH VKDUH RI IHPDOH IDUP PDQDJHUVLVWKHKLJKHVWLQ/LWKXDQLD

(109) DQG/DWYLD

(110) HVSHFLDOO\LQROG HUDJHJURXSV>)UDQLü@LQSDUWH[SODLQHGE\WKHKLJKHUPLJUDWLRQUDWLRRIPHQ LQWKHDFWLYHDJHJURXSDQGWKHKLJKHUOLIHH[SHFWDQF\RIZRPHQ 6WURQJPDOHGRPLQDQFHLVREVHUYDEOHLQWKH&]HFK5HSXEOLFDQG6ORYDNLD ZKHUH RQO\ DQG RI WKH IDUPV ZHUH PDQDJHG E\ ZRPHQ LQ %HWZHHQDQGWKHUDWHRIWKHUHGXFWLRQRIWKHQXPEHURIIHPDOHIDUP PDQDJHUV ZDV WKH PRVW UDSLG LQ 6ORYDNLD WKH &]HFK 5HSXEOLF DQG 3RODQG DQG UHVSHFWLYHO\

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

(112) IDPLO\ODERXULQWKHWRWDOUHJXODUIDUPODERXUIRUFH$VIRUWKH(806¶VLQ 6ORYDNLDLQDOOSK\VLFDOVL]HFDWHJRULHVWKHUDWLRVRIPDOHVWRIHPDOHVHQJDJHG ZHUH KLJKHU WKDQ WKH DYHUDJH HVSHFLDOO\ LQ VPDOO DQG PHGLXPVL]HG IDUPV ZKHUHWKHUDWLRZDVDOPRVWWZLFHDVKLJKDVWKHDYHUDJHIRUWKH(8,Q%XO JDULD+XQJDU\DQG5RPDQLDWKHUDWLRRQWKHODUJHIDUPVZDVVLJQLILFDQWO\KLJK HUDERYHFRPSDUHGWRWKH(8DYHUDJH%\FRQWUDVWUHJDUGLQJ3RODQG (VWRQLD/LWKXDQLDDQG/DWYLDWKHJHQGHUUDWLRZDVEHORZWKHDYHUDJHLQDOOVL]H FDWHJRULHVZKLFKWKH%DOWLFFRXQWULHVWXUQHGWRWKHEHQHILWRIIHPDOHZRUNIRUFH LQIDUPVXSWRKHFWDUHV8$$ )LJXUH

(113) )LJXUH*HQGHUUDWLRLQWKH(80HPEHU6WDWHVE\WKHGLIIHUHQWSK\VLFDOIDUPVL]H FDWHJRULHVLQDQGFKDQJHVLQSRLQWYHUVXV RQWKHULJKW

(114) . . Source: EUROSTAT [n.d.].. &RQVLGHULQJWKHJHQGHUGLVWULEXWLRQRIHPSOR\HHVRIWKHDJULFXOWXUDOVHF WRUWKHUHDUHUHPDUNDEOHGLIIHUHQFHVEHWZHHQWKH(806¶V)HPDOHHPSOR\ PHQWLQDJULFXOWXUHLVW\SLFDOO\VWURQJLQWKRVHFRXQWULHVZKHUHWKHVKDUHRIWKH DJULFXOWXUDOVHFWRULQWKHQDWLRQDOHFRQRP\H[FHHGVWKH(8DYHUDJH HJ3R ODQG5RPDQLD

(115) RUZKHUHVXSSOHPHQWDU\DFWLYLWLHVUHODWHGWRDJULFXOWXUHDQGRI IHULQJDPRUHEDODQFHGXVHRIODERXUIRUFH WRXULVPOHLVXUHWLPHDFWLYLWLHV

(116) SOD\ DPRUHLPSRUWDQWUROH HJ6ORYHQLD

(117) >(&@)XOOWLPHHPSOR\PHQWLQDJUL FXOWXUHLVFRQVLGHUDEO\OHVVIUHTXHQWDPRQJIHPDOHHPSOR\HHVFRPSDUHGWRPHQ DQG IHPDOH HPSOR\HHV RIWHQ DFW DV GHSHQGHQWV RU LQYLVLEOH DX[LOLDU\ IDPLO\ PHPEHUVLQVWHDGRIEHLQJHPSOR\HHVVDWLVI\LQJWKHODERXUIRUFHGHPDQGVRIWKH IDUPVDQGWKH\XVXDOO\KDYHXQIDYRXUDEOHZDJHVFRPSDUHGWRPHQ>(&@. .

(118) $OWKRXJK LQ DOPRVW PLOOLRQ IDUPV ZHUH PDQDJHG E\ ZRPHQ LQ WKH(8LQWKH5'SURJUDPPHVIRUWKH±SHULRGRQO\PRGHVWDWWHQ WLRQ ZDV SDLG WR JHQGHU DVSHFWV ZKLOH UHTXLUHPHQWV IRU HTXDO RSSRUWXQLWLHV HPHUJHG SULPDULO\ LQ UHODWLRQ WR /($'(5 7KH RQO\ H[FHSWLRQ ZDV /LWKXDQLD ZKHUHLQWKHFDVHRIDQXPEHURI$[LVDQG$[LVPHDVXUHVZRPHQZHUHSUH IHUUHG DQG LQ WKH FDVH RI PHDVXUHV 0 Diversification into non-agricultural activities DQG 0 Support for the creation and development of microenterprises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

(119) >'XGHN et al.@ $QXPEHURIUHVHDUFKHUVKDYHSRLQWHGRXWWKDWWKHUHLVDVWURQJVLJQLILFDQW UHODWLRQVKLSEHWZHHQWKHLQYHVWPHQWDFWLYLW\UHVXOWVRISURGXFWLRQDQGWKHOHYHO RI SURIHVVLRQDO TXDOLILFDWLRQV RI IDUP PDQDJHUV >1RZDN @ 0RUH TXDOLILHG IDUPHUVQRWRQO\DGDSWPRUHHDVLO\WRFKDQJLQJFLUFXPVWDQFHVEXWWKH\DUHDOVR PRUH HIILFLHQW LQ VHHNLQJ DQG LPSOHPHQWLQJ QHZ VROXWLRQV >%LUy et al. @ $KLJKOHYHORISURIHVVLRQDOWUDLQLQJRIIDUPPDQDJHUVJUHDWO\UHGXFHVWKHULVN RIOLTXLGDWLRQRIIDUPV 7DEOH

(120) . .

(121) 7DEOH'LVWULEXWLRQRIIDUPPDQDJHUVE\WKHLUYRFDWLRQDOTXDOLILFDWLRQV DQGHFRQRPLFIDUPVL]HFDWHJRULHV (FRQRPLF IDUPVL]H (85

(122) . 3UDFWLFDOH[SHULHQFHRQO\ (8. %DVLFWUDLQLQJ. (8 (8 (8 (8 (8 (8 (8 (8. . )XOODJULFXOWXUDOWUDLQLQJ. thousand . . . . . . . !. . . . . . . . . . . . . . . . 7RWDO. . . . . . . . rate (%). . . . . . . . . . . !. . . . . . . . . . . . . . . . . . . . 7RWDO. . . . . . . . . . Source: EUROSTAT (2015).. $OWKRXJKKXPDQFDSLWDOLVDGULYHURILQFUHDVLQJSURGXFWLYLW\WKHOHYHORI SURIHVVLRQDOTXDOLILFDWLRQVRIIDUPHUVLQWKH(8LVYHU\ORZ>(&@7KH PDMRULW\ RI IDUPHUV

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µOLIHORQJOHDUQLQJ¶PRGHOWKHJURZLQJLPSRUWDQFHRIQRQIRUPDO LHRXWVLGH . &RQVLGHULQJWKDWLQWKH(806¶VVHOIHPSOR\LQJLQGLYLGXDOIDUPVSUHGRPLQDWHDQRYHU YLHZRIWKHKXPDQFDSLWDOHQGRZPHQWRIIDUPPDQDJHUVLQSUHVHQWHG .

(124) RIWKHHGXFDWLRQV\VWHP

(125) WUDLQLQJDQGWKHJURZLQJQXPEHURIVWXGHQWVVWXG\LQJ DEURDG

(126) RQO\DPLQRULPSURYHPHQWFDQEHREVHUYHGLQWKLVUHVSHFWFRPSDUHGWR WKHDYHUDJHRIWKH(8HVSHFLDOO\LQUXUDODUHDV>%HQFKHYDet al.0DMHURYi et al.:U]RFKDOVND@ 2IWKH(806¶VWKHOHYHORIHGXFDWLRQDODWWDLQPHQWRIWKHUXUDOSRSXODWLRQ LV PXFK ORZHU WKDQ WKH DYHUDJH RI WKH (8

(127) LQ %XOJDULD

(128) DQG LQ 5RPDQLD

(129) 7KHDFFXPXODWLRQRIKXPDQFDSLWDOLVUHVWULFWHGE\WKDWWKHPRGHO RIµOLIHORQJOHDUQLQJ¶WDNHVURRWVZLWKDVORZSDFHLQWKH(8ZLWKVLJQLILFDQWUH JLRQDOGLIIHUHQFHV:KLOHLQWKH(8RIWKHSRSXODWLRQDJHGEHWZHHQDQG WDNHVSDUWLQDQ\NLQGRIWUDLQLQJDQQXDOO\RQDYHUDJHLQWKH(8WKHILJXUHLV RQO\,QVSDUVHO\SRSXODWHGUXUDODUHDVWKLVILJXUHLVORZHUIRUWKH(8 DQGIRUWKH(8 7KHORZOHYHORIKXPDQFDSLWDOLQWKH(8FDQEHH[SODLQHGE\DQXP EHU RI IDFWRUV ,Q WKH SRVWVRFLDOLVW FRXQWULHV DW WKH EHJLQQLQJ RI WKH V LQ FRPSOLDQFHZLWKHFRQRPLFUHVWUXFWXULQJDFWRUVZLWKQRDJULFXOWXUDOWUDLQLQJHQ WHUHGWKHVHFWRUHQPDVVH>0DMyF]NL.DWRQD'XGHNet al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et al. @ $OWKRXJK IDUPHUV¶ SDUWLFLSDWLRQ LQ WUDLQLQJ KDV LQFUHDVHG UHPDUNDEO\ LQ WKH ODVW \HDUVGXHWRWKHFRPSXOVRU\WUDLQLQJFRXUVHVDWWDFKHGWR5'PHDVXUHV HJ0 0RGHUQL]DWLRQRIDJULFXOWXUDOKROGLQJV0$GGLQJYDOXHWRDJULFXOWXUDODQGIRU HVWU\SURGXFWVDQG0,QIUDVWUXFWXUHUHODWHGWRWKHGHYHORSPHQWDQGDGDSWDWLRQ RIDJULFXOWXUHDQGIRUHVWU\

(130) DWWKHOHYHORIIDUPVLQYHVWPHQWLQKXPDQFDSLWDOKDV QRWEHHQDSULRULW\0RVWIDUPHUVDQGDJULFXOWXUDOSROLF\PDNHUVPD\KDYHQRW\HW UHFRJQLVHGWKDWWKHKLJKHUWKHOHYHORINQRZOHGJHRIIDUPHUVWKHPRUHFDSDEOHWKH\ FRXOG EHQRW RQO\ WR LPSURYH HIILFLHQF\ RI SURGXFWLRQEXW DOVR WR DGDSW WR HQYL URQPHQWDOFKDOOHQJHVDQGWRPDUNHWFKDQJHV . $JJUHJDWHGGDWDIRUUXUDODUHDVDUHRQO\DYDLODEOHDW(8OHYHO>(&@ .

(131) (8VXSSRUWWRDJULFXOWXUH :LWKWKHH[FHSWLRQRI6ORYHQLDWKHSRVWFRPPXQLVW06¶VLQWURGXFHGWKH 6LQJOH $UHD 3D\PHQW 6FKHPH 6$36

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

(133) FKDQJLQJWKHLUSURGXFWLRQSURILOHDQGH[SDQGLQJ 7KH RYHUZKHOPLQJ ZHLJKW RI DUHD EDVHG GHFRXSOHG SD\PHQWV XQGHU WKH 6$36WKHJHQHURVLW\RIWKH(8FHUHDOVLQWHUYHQWLRQV\VWHP XQWLODGUDVWLFFXWLQ WKHTXDQWLWLHVWREHWDNHQLQWRLQWHUYHQWLRQ

(134) DQG(8ELRIXHOSROLFLHVJDYHLPSH WXVWRDUDEOHSURGXFWLRQPDLQO\DWWKHH[SHQVHRIOLYHVWRFNIDUPLQJHVSHFLDOO\LQ WKRVH (8 06¶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

(135) >&LDLDQ DQG .DQFV@. .

(136) &RXSOHGSD\PHQWVDUHQHJDWLYHO\DVVRFLDWHGZLWKH[LWUDWHVDVWKH\LQFUHDVH WKH PDUJLQDO YDOXH RI IDUP ODERXU DQG HQFRXUDJHIDUPHUV WR UHPDLQ LQ WKH VHFWRU >7RFFR et al +HQQHVV\ DQG 5HKPDQ @ 1HYHUWKHOHVV WKH LQWHQVLW\ RI ODERXUXVH ZRUNLQJKRXUVKHFWDUH

(137) KDVEHHQGHFOLQLQJIDVWHULQWKH(8VLQFHWKH LQWURGXFWLRQRIGLUHFWSD\PHQWVDOWKRXJKLWKDVEHHQREVHUYHGLQDOOUHJLRQVRIWKH (8ZKLFKLVFRQVLVWHQWZLWKWKHJHQHUDOORQJWHUPGHFOLQHLQZRUNIRUFHHPSOR\ PHQW LQ WKH VHFWRU 7KHGHFRXSOLQJRI (8 GLUHFW SD\PHQWV KDVFRQWULEXWHGWR WKH DFFHOHUDWHG UHGXFWLRQ LQ WKH LQWHQVLW\ RI ODERXU XVH LQ (8 DJULFXOWXUH >3HWULFN DQG=LHU@DQGWKHUHGXFWLRQKDVEHHQPRUHVLJQLILFDQWLQFRXQWULHVDQGUHJLRQV ZKHUHFRXSOHGSD\PHQWVVXSSRUWHGODERXULQWHQVLYHDFWLYLWLHV %DVHGRQ&RXQFLO5HJXODWLRQ (&

(138) 1R5'SURJUDPPHVIURP WRLQWKH(806¶VDLPHGDWLPSURYLQJWKHFRPSHWLWLYHQHVVRIWKHDJ ULFXOWXUDODQGIRUHVWU\VHFWRU $[LV

(139) LPSURYLQJWKHHQYLURQPHQW $[LV

(140) DQG WKHFRXQWU\VLGHDQGSURPRWLQJTXDOLW\RIUXUDOOLIHDQGGLYHUVLILFDWLRQRIWKHUX UDOHFRQRP\ $[HVDQG

(141) 0HDVXUHVDLPLQJDWLPSURYLQJFRPSHWLWLYHQHVV XQGHU$[LV

(142) KDGRQDYHU DJH KLJKHU VKDUHV RI WKH EXGJHWV RI WKH 5' SURJUDPPHV ZLWKRXW VSHQGLQJ RQ WHFKQLFDODVVLVWDQFH