International competitiveness of Estonian cereal production
2009
Omel, R., Estonia | Vaernik, R., Estonia
The aim of the paper is to analyse the international competitiveness of Estonian cereal production during the period of 2001-2006. Cost based approach is used for characterising competitiveness of agricultural production opportunity. The dynamics of prices of non-tradable production inputs is observed. The data from the EU database of FADN are used for describing the structure of producers. The analysis is based on average indicators of agricultural sector on an example of field crops production. The analysis of social profitability indicates that the scale of the enterprise plays an important role in competitiveness. Considering the opportunity cost price of resources the small-scale production is inefficient and in longer perspective not sustainable. The evaluation of competitive advantage showed that only large-scale enterprises have a minimal competitive advantage in production. Value of the relevant index characterising the competitiveness approximately equals to one, which means that the price of usage of domestic resources is equal to value added found on the basis of import prices. Despite the fact that in production the use of labour has decreased, the small-scale producers use considerably more labour for the same amount of end product compared to large-scale producers, and the changes in relative price of production factors affect small-scale producers more than large-scale producers, due to the use of more labour-intensive technologies are used.
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