USING THE TFP INDEX TO MEASURE CHANGES IN AGRICULTURAL PRODUCTIVITY IN THE EU // PRIMENA TFP INDEKSA U MERENJU PROMENA POLJOPRIVREDNE PRODUKTIVNOSTI U EU

Abstract

In its development paper Europe 2020, the European Commission defined the ambitious goal of raising the level of resource efficiency. As a means of achieving this goal in the agricultural sector, the demand for increased productivity was replaced by the naturally based development of agriculture, which should be based on scientific foundation. The main results of this change should be higher outputs obtained with less investment. The aim of this paper is to determine whether this requirement is met. In this context, and in this paper, an analysis of the trends in agricultural productivity in the countries of the European Union in the period 2005-2015 was carried out by using the model of total factor productivity. The selection of the TFP index for measuring agricultural productivity in the paper proved to be correct since it enabled us to determine which of the several observed input factors had the greatest impact on the observed productivity trends. A general conclusion derived from the obtained results is that the overall productivity of agriculture in the EU has slowed growth in recent years and has started to lag behind leading global competitors. This indicates that, observed by the standards of modern agriculture, the modest growth of productivity in agriculture, is based on unsustainable principles, primarily in the intensive reduction of employees in agriculture, rather than on the application of scientific achievements. In the circumstances of limited natural resources, these achievements are the only possible source of sustainable growth.