Changes in Production Factor Relations and their Determinants in Agriculture in Selected European Union Countries

The article examines trends in changes in relations among three production factors (land, labor, and capital) in agriculture in the selected European Union countries. For the purpose, the assumptions regarding the direction and the mechanism of changes in the relations were verified empirically. It was assumed that the basis of the mechanism is the ratio of changes in factor productivity to changes in the prices (remuneration) of these factors. Trends in production factors were verified empirically using agricultural economic accounts as well as statistics on labor and land inputs in agriculture collected by Eurostat. The trends in changes in the relations among production factors correspond to the capital-intensive stage of growth in agriculture. A strong trend of decline in the labor factor in agriculture was demonstrated along with the reduction of land in the EU agriculture. The changes were accompanied by diversified involvement of the capital factor in agriculture. With a constant increase in the volume of agricultural production, there is a corresponding increase in the productivity of the production factors. The increase is the smallest in the case of the capital factor, because it performs not only a growth function, but also is a substitute for the decline in other factors. An increased productivity of the production factors is related to an increase in their remuneration reflected by an increase in their prices. The deviations from capital-intensive growth in agriculture observed in the empirical study indicate other factors influencing the remuneration of production factors in agriculture.