Production, employment and productivity of agricultural sector in the European Union

Silvia Megyesiova

Abstract: Gross value added, employment and productivity are important criteria of economic development. These indicators were monitored separately for the entire economy of the EU countries and for the NACE section A: Agriculture, forestry and fishing. In 2000 Bulgaria and Romania were the most agrarian countries among EU Members, the contribution of section A in both countries was higher than 12% compared with only 0.7% in Luxembourg. The smallest contribution was typical for the most developed EU countries. The proportion of employment in agricultural sector was in Romania as high as 44.9% in 2000. The high gap between the shares of employment and contribution of section A resulted in an extremely low productivity in section A. The lowest productivity in agricultural sector in 2000 was achieved in Romania. Increase of the production and a decrease of the employment in agricultural sector led to a very high increase of labour productivity (LP) especially in the new EU countries. Real LP in section A increased in Slovakia between 2000 and 2019 by 748.3%, in Romania by 271%, Latvia by 249.4%. Low productivity in section A in the new EU countries in year 2000 was combined with a very strong real growth of the LP between 2000 and 2019. This resulted into sigma convergence of the LP. Coefficient of variation, the sigma convergence coefficient, decreased in the analysed time span from 62.3% to 53.1% in case of the overall LP and from 79.1% to 64.5% in case of the LP in agricultural sector. The LP in section A is still lower compared with the LP total, but the trend of the development is positive. In 2000 the LP in section A accounted for only 24% of the total LP but this proportion increased gradually to 38 % in 2019. Positive changes in agricultural sector can make it more attractive to investors, employees, self-employed persons and so to increase the living standard of population, especially in the rural area.

Keywords: agricultural sector; employment; European Union; gross value added; NACE section A; productivity

Date published: 2021-10-19