Dynamics of European agricultural productivity: An analysis of regional convergence

This paper analyses the evolution of the European agricultural productivity distribution under the hypothesis of persistent differences in productivity levels over time. We use the Cambridge Econometrics European Regional Database and work on a sample of 125 EU-15 regions from 1985 to 2004. Density functions, transition matrices and stochastic kernels are combined to study the dynamics of the productivity distribution. We observe no evidence of strong productivity convergence. Regional disparities across European agricultures are large and persistent. The highest levels of persistence are concentrated in both extremes of the productivity distribution. Additionally, we propose a regional typology on the basis of different structural patterns according to the economic and territorial dimension of the holdings, the characteristics of the labour force and the productive specialization. The main result is that the diversity of patterns conditions productivity and hinders sectoral convergence. Divergence in agricultural productivity will continue if differences in structural patterns persist in the future