Becoming a member of the European Union is one of the most important objectives of the Czech Republic for the coming years, both for the government, and for the Czech society as a whole." With the exception of a few traditional Czech products, the Czech Republic is not a major exporter of agricultural goods due to its land-locked position and relatively poor product differentiation. Since the "velvet revolution" in 1989, agricultural production has declined. To conform to European Union standards for accession, the Czech Republic needs to make some adjustments. This report reviews the current state of Czech agriculture and agro-industry in the context of EU accession. It analyzes institutional reforms and their actual impacts and proposes a series of adjustments to complete the reforms in the agricultural sector. This report is intended for agricultural scientists, public officials, agricultural and agro-industrial leaders, and researchers interested in the transformation of agriculture in the transition economies and in issues pertaining to accession of Central and East European candidate countries to the European Union.
Becoming a member of the European Union is one of the most important objectives of the Czech Republic for the coming years, both for the government, and for the Czech society as a whole." With the exception of a few traditional Czech products, the Czech Republic is not a major exporter of agricultural goods due to its land-locked position and relatively poor product differentiation. Since the "velvet revolution" in 1989, agricultural production has declined. To conform to European Union standards for accession, the Czech Republic needs to make some adjustments. This report reviews the current state of Czech agriculture and agro-industry in the context of EU accession. It analyzes institutional reforms and their actual impacts and proposes a series of adjustments to complete the reforms in the agricultural sector. This report is intended for agricultural scientists, public officials, agricultural and agro-industrial leaders, and researchers interested in the transformation of agriculture in the transition economies and in issues pertaining to accession of Central and East European candidate countries to the European Union.
The study reviews the share of agriculture in the Czech economy, which has diminished significantly since 1989. Two opposing trends are analyzed: a) a reduction in the agricultural production; and, b) a recovery in the Gross Domestic Product (GDP) between 1994-1996, after a sharp contraction in the first years of transition, with the share of agricultural employment dropping by half in 1997. Such reduction, however, facilitated by new opportunities in non-agricultural activities, resulted in improved agricultural labor productivity. The report indicates that while, a marked slow-down in agricultural production exists, a slow switch from animal production to crop production is being experienced. The status of sectoral reforms as of 1989 is examined, focusing on three categories of institutional reforms, and their impacts: 1) the creation of a macro-framework and incentives for producers, processors, and traders; 2) the privatization of major means of production - primary agriculture, agro-processing, and, input supply; and 3) the changes in institutions and regulations aimed at enhancing market development. A series of adjustments are proposed for the completion of reforms in the areas of financial consolidation of farms, privatization of state-owned land, competitiveness, and, development of a market institutional framework, envisaging the transformation for accession to the European Union.
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