Original scientific paper

DOES COMPARATIVE ADVANTAGES IN AGRO-FOOD TRADE MATTER FOR MULTIFUNCTIONAL RURAL DEVELOPMENT: THE CASE OF HUNGARY AND SLOVENIA

2006, 7 (3)   p. 583-586

Štefan BOJNEC, Imre Fertő

Abstract

This paper investigates revealed comparative trade advantages in agro-food trade and their associations with multifunctional and sustainable rural development. We analyze revealed comparative advantages of Hungarian and Slovenian agro-food trade in the European Union (EU) markets. Both the levels and pattern of the revealed comparative advantage measure are investigated. The empirical research seeks to explain how revealed comparative advantages have developed across main product groups and over time and what are likely their implications for multifunctional rural development in the enlarged EU. We employ a disaggregated trade dataset to identify the revealed comparative advantages across products groups and their patterns over time to provide broader policy implications. The empirical results for Hungary confi rmed few agro-food product groups with revealed comparative advantages in the EU markets, but have not identifi ed any such agro-food product group for Slovenia. Agro-food sectors in Hungary are likely to continue to have a signifi cant role in the Hungarian rural areas, but employment and income activities are more likely to be combined with other more rapidly growing service activities. In Slovenia, traditional agro-food activities under increasing competitive pressures are more likely to shrink. The agro-food sector is likely to restructure towards non-traditional ways of production and marketing such as bio-production and rural tourism at farms, but also the role multifunctional agricultural and nonagricultural, services activities in sustainable rural development are likely to increase signifi cantly.

Keywords

revealed comparative advantage, multifunctional development, hungary, slovenia

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