EU accession boosted Central European farm productivity
– but the gains did not last
Lukáš Čechura, Štefan Bojnec, Jan Falkowski, Imre Fertő
When ten Central and Eastern European countries joined the European Union in 2004, agriculture was expected to be one of the sectors to benefit most. Access to the Common Agricultural Policy (CAP), larger markets and new investment opportunities promised to help farmers modernise and close the productivity gap with Western Europe.
Two decades later, the picture is more complicated.
In a new study, we examine how productivity developed on cereal-producing farms in the Czech Republic, Hungary, Poland and Slovenia between 2004 and 2017. Rather than finding a steady process of convergence following EU accession, we observe something closer to a productivity surge followed by a loss of momentum.
This matters because it suggests that providing farmers with access to capital and technology may be much easier than sustaining productivity growth over the longer term.
EU accession created an opportunity for agricultural catch-up
There were good reasons to expect EU membership to transform agriculture in the new member states. Farmers gained access to CAP payments, while integration into the common market reduced barriers to trade and increased opportunities for investment.
One important expectation was that subsidies would relax financial constraints. Farms that had previously struggled to finance machinery and other investments could modernise their production. In principle, this should have allowed them to use land, labour, capital and other inputs more productively.
To assess whether this happened, we use Farm Accountancy Data Network data and study cereal-producing farms over the period from accession in 2004 to 2017. We focus on total factor productivity (TFP). Unlike simple measures such as output per worker or yield per hectare, TFP considers several inputs simultaneously and asks how effectively they are transformed into outputs.
We also separate productivity developments into three components: technological change, technical efficiency and scale efficiency. This distinction is important. A farm can become more productive because better technology becomes available, because existing technology is used more efficiently, or because the farm moves closer to an economically appropriate scale of operation.
The initial productivity gains did not continue
At first sight, the results provide some support for the optimistic expectations surrounding enlargement.
Productivity increased during the early years following accession. By 2017, total factor productivity was still above its 2004 level in the Czech Republic, Hungary and Poland. Slovenia followed a different trajectory and finished the period below its initial productivity level.
But comparing only 2004 and 2017 hides the most interesting part of the story.
In the Czech Republic and Hungary, productivity increased substantially during roughly the first five or six years after accession and subsequently declined by almost as much. Poland experienced the same broad pattern, although both its initial rise and later decline were more modest. Slovenia initially experienced falling productivity before recovering some of these losses later in the period.
EU accession therefore seems to have produced an initial productivity impulse rather than a permanent acceleration in productivity growth.
Technology explains much of the rise – and the subsequent slowdown
The evolution of technology closely mirrors the development of productivity.
In the Czech Republic, Hungary and Poland, technological change followed an inverted-U pattern. Technological progress was particularly strong in the years immediately following accession before weakening later. Slovenia again differed, experiencing a more persistent decline in technological change after the first few years.
One plausible interpretation is that accession opened a window for rapid modernisation. CAP support may have eased financing constraints and enabled farms to invest in machinery and other technologies that had previously been difficult to afford.
However, the study cannot establish that subsidies caused the observed productivity changes. The relationship between agricultural subsidies and productivity is more complicated. Subsidies can facilitate investment and innovation, but they can also weaken incentives to reorganise production or allow less efficient farms to remain in operation.
The later slowdown may also reflect changing objectives within agricultural policy. As the CAP increasingly incorporated environmental goals, farms devoted more resources to environmental and other non-market outputs. Conventional productivity measures focused on economic production may therefore fail to capture some of the benefits generated by these activities.
Owning better technology is not the same as using it efficiently
The findings also point to a second problem. Technological modernisation was not consistently accompanied by improvements in the efficiency with which farms used their inputs.
Polish cereal farms started the period with relatively high technical efficiency – around 94.5% of estimated technological potential – leaving comparatively little room for improvement. Hungarian farms began at around 85%, yet technical efficiency in 2017 remained close to its initial level. This suggests persistent difficulties in translating available technology into the maximum possible output from existing inputs.
This distinction has important implications. Policies that make new machinery or technologies affordable do not automatically guarantee productivity improvements. Management capabilities, knowledge, organisational practices and the way technology is integrated into production can be just as important as the investment itself.
Farm size presents another challenge
Across all four countries, scale efficiency generally deteriorated over the period, suggesting that farms increasingly struggled to operate at an economically optimal size.
The decline was particularly pronounced in the Czech Republic and Hungary, countries characterised by highly uneven farm structures combining many small farms with much larger commercial operations. Poland and Slovenia, where average cereal farms in the sample were substantially smaller, followed somewhat different trajectories.
The study suggests several possible explanations. Direct payments may initially have enabled smaller and medium-sized farms to remain in production, slowing the reallocation of land towards more efficient producers. Structural change from livestock towards crop production may also have affected scale efficiency.
Yet farm structure alone does not determine productivity. Despite very different average farm sizes, the Czech Republic, Hungary and Poland ultimately display surprisingly similar technological productivity patterns.
Agricultural policy needs to look beyond investment
Twenty years after the 2004 enlargement, the findings offer a broader lesson about economic convergence.
EU accession appears to have created conditions for a rapid technological catch-up among Central European cereal farms. But technological upgrading alone was not enough to generate continuously increasing productivity.
For agricultural policy, this suggests shifting attention from simply supporting investment towards understanding what happens after investments are made. Policies that improve management skills, facilitate knowledge diffusion, allow efficient restructuring and help farms adapt technologies to their particular circumstances may be important complements to investment support.
At the same time, productivity should not be interpreted too narrowly. If agricultural policy increasingly asks farms to produce environmental benefits alongside food, evaluating performance solely through market output risks describing environmentally oriented activity as economic inefficiency.
The central lesson is therefore not that EU agricultural support failed. Rather, accession created a significant opportunity for productivity improvement, and farms initially responded to it. What proved harder was turning that initial technological catch-up into sustained productivity growth.
For future enlargements – and for future reforms of the CAP – that distinction may be as important as the size of the subsidies themselves.
Lukáš Čechura, Štefan Bojnec, Jan Falkowski, Imre Fertő: Has the agricultural productivity increased after European Union enlargements in Central European countries? Evidence from four countries’ cereal production AGRICULTURAL ECONOMICS-ZEMEDELSKA EKONOMIKA , 10 p. (2026)
