Absolute and Comparative Competitiveness of Farming Structures in Bulgaria

Abstract

Agricultural farm (firm) is an abstract category in the Economics theory for describing the agents managing farming activity, while the real governing structures are the farms of different juridical types - one person, family, cooperative, corporative, etc. The competitiveness of farming enterprises is predominately assessed through traditional indicators of technical and accountancy efficiency, factors of productivity, profitability of activity, market shares, etc. while the critical governance aspects are largely ignored. This paper incorporates the interdisciplinary New Institutional Economics, suggests a holistic multipillars framework for the assessment of the competitiveness of governing structures of farming activity, and assesses absolute and comparative competitiveness of Bulgarian farming enterprises. The main “pillars" of farm competitiveness are Economic efficiency, financial endowment, Adaptability and Sustainability. For assessing the level of competitiveness of Bulgarian farms, a holistic system of 4 criteria for each Pillar and 17 particular and 5 integral indicators are used.

The study has found that the level of competitiveness of agricultural holdings in the country is at a good level, but there is significant differentiation in the level and factors of competitiveness of holdings with different juridical types, sizes, product specialization, ecological and geographical location. The low adaptive potential and economic efficiency to the greatest extent contribute to lowering the competitiveness of Bulgarian agricultural producers. A large share of farms of different types has a low level of competitiveness, and if measures are not taken in due time to increase competitiveness by improving the management and restructuring of farms, adequate state support, etc., a large part of Bulgarian farms will cease to exist shortly. This study found that besides the juridical type, other dimensions of governance structures like economic size, product specialization, location, and market of self-sufficiency orientation, are critical for determining their absolute and comparative competitiveness.