Structural Change In European Agriculture

In this paper we analyse the drivers of farm structural change in the EU with a novel analytical framework, the Multiplicative Competitive Interaction (MCI) model. We use single farm data from the Farm Accountancy Data Network (FADN) for the period 1989-2011. Eight production specialisations and two size classes represent farm typologies at NUTS 2 regional level. The estimates indicate that initial state (path dependency) explains about 39.2% of EU farm structural change followed by natural conditions (18.3%) and subsidies and income (13.2%). Furthermore, the results suggest a more rigid farm structure in old compared to new EU Member States