Economic crisis and Total Factor Productivity Growth in Hungarian Agri-Food Economy József Fogarasi 1, 2 Anna Zubor-Nemesa 1, 3, Orsolya Tótha 1 1 Research Institute of Agricultural Economics, Budapest 2 Partium Chrisitan University 3 Corvinus University of Budapest Budapest, May 12, 2015 Paper prepared for presentation for the III. MAKE Conference

2 Schedule of the presentation  Introduction  Previous literature findings  Methodology and data  Empirical results  Conclusion and discussion

3Introduction  Motivation –Important changes have been experienced in Hungarian agriculture and food industry – haw has contributed to these changes the production performance? –Comparative investigations of production performance in agriculture and food industry missing  Research problems –Are there major differences in the production performance experienced in agriculture and food industry?  Objective –The aim of this paper is to assess total factor productivity change and its driving factors in Hungarian agriculture and food industry using DEA and metafrontier analysis

4 Previous studies  Hungary agriculture –Baráth et al (2009), Bakucs et al (2010), Bakucs et al (2012), Baráth and Fert ő (2013)  Comparative studies agriculture and food industry in Hungary

5 Theoretical framework  Microeconomics – production economics –Farm production performance: efficiency and productivity  Relative farm performance estimation based on the efficient frontier

6 Methodology and data  Standard methodological possibilities for assessing production performance: Stochastic Frontier Analysis and Data Envelopment Analysis  Data Envelopment Analysis – linear programming procedure: –output oriented, –2 outputs and 4 inputs –rotating panel data –Period:  Data: Hungarian FADN and NAV data

7 Empirical results – evolution of productivity change

8 Empirical results – productivity change - size classes Source: Authors’ calculations based on Hungarian and Polish FADN data. Hungary Very small Small Medium -small Medium- large Large Very large Number of observations - whole period TFP change TFP change Technological change Technological change Total technical efficiency change Total technical efficiency change Pure technical efficiency change Pure technical efficiency change Scale efficiency change Scale efficiency change

9 Conclusions and further research  Sector analysis  Crisis  Metafrontier analysis reveals that Hungarian agricultre and food industry.

Thank for attention!