Introduction
Animal production in Central and Eastern European Countries (CEEC) changed dramatically during the last five years. There is no stone still staying unturned after the historical and political changes that have occurred. The differences are most transparent in respect of economic, political and legal conditions of running business and market is already to a some extent the most important factor for allocating resources. Now land, labor and capital have just reached their price. The challenge of time surprised many farmers, the organization of private and state owned farms has met with many problems. Policy is in search of different agricultural models, usually trying to find solutions in the imitation of protection model by the Common Agricultural Policy (CAP) in the European Union (EU). No negligible changes occurred either in international economic and political environment. Most CEEC want to become member of EU. Timing, way and consequences of their likely accession to EU are still points of uncertainty both for Western and new Eastern European partners.
What has happened in animal production structure, in market development and in agricultural policy after 1990, what is likely to happen in milk, cattle, pig and sheep production are key questions that we are trying to answer in this paper. The outlook of the economic position is the background for a short discussion about the likely effects of these differences on the organization and the degree of intensity of animal production. In conclusions, some inconsistencies and dilemmas are emphasized, which from the agricultural economists’ point of view, define to a large extend, the breeding strategies for milk, beef, pig and sheep production in the CEEC.
The main source of statistical data is the "EU-Commission DC VI" and the "Vienna WIFO institute data set". Data of only 10 potential members of EU are presented in this paper (CEFTA and the Baltic countries, Romania and Bulgaria), for which we succeeded in ensuring a minimum criteria of reliability.
Data should be interpreted carefully in particular because of the diversity of sources and of the different methodologies which are being used.
CEEC livestock production in transition
Macroeconomic background and resources
CEEC- 10 represent, from geographic and demographic point of view, an important part of Europe. These countries account approximately for one third of the population and of the EU area. Their structure of agricultural land is better as they have twice as much arable land per capita than the EU members. Their economic importance is still low; on average they achieve 11% of GDP of EU. The Czech Republic and Slovenia as the most developed countries in this region, are currently somewhere on a level with Greece and Portugal (GDP per capita). Crisis of economic transition reached the lowest point in 1993. In 1994 and 1995, new economic growth was observed in most of the CEEC- 10.
Agriculture is much more important in most CEEC than in EU. This is particularly true for Romania and Bulgaria, followed by the Baltic states. Some countries are traditional food exporter, e.g.: Hungary and Bulgaria and to some extent also Poland and Romania.
Table 1. CEEC in comparison with EU (1994)
Population | Total area | Agric. area | Arable area | GDP | GDP p.c. | ||||
(106) | (106 ha) | (106 ha) | (% total) | (106 ha) | (% total) | (109 ECU) | (ECU) | (ECU PPP) | |
Poland | 38.5 | 31.3 | 18.6 | 59 | 14.3 | 0.37 | 73.4 | 1907 | 4838 |
Hungary | 10.3 | 9.3 | 6.1 | 66 | 4.7 | 0.46 | 32.5 | 3150 | 5967 |
Czech Rep. | 10.3 | 7.9 | 4.3 | 54 | 3.2 | 0.31 | 26.7 | 2586 | 7507 |
Slovakia | 5.3 | 4.9 | 2.4 | 49 | 1.5 | 0.28 | 8.7 | 1643 | 6367 |
Slovenia | 1.9 | 2.0 | 0.9 | 43 | 0.2 | 0.13 | 9.8 | 5018 | 7697 |
CEFTA+ | 66.4 | 55.4 | 32.3 | 58 | 24.0 | 0.36 | 151.1 | 2277 | 5635 |
Romania | 22.7 | 23.8 | 14.7 | 62 | 9.3 | 0.41 | 21.8 | 961 | 2941 |
Bulgaria | 8.5 | 11.1 | 6.2 | 55 | 4.0 | 0.48 | 9.4 | 1110 | 3754 |
Balkan | 31.2 | 34.8 | 20.9 | 60 | 13.3 | 0.43 | 31.2 | 1001 | 3163 |
Lithuania | 3.8 | 6.5 | 3.5 | 54 | 2.3 | 0.62 | 2.3 | 627 | n.a. |
Latvia | 2.6 | 6.5 | 2.5 | 39 | 1.7 | 0.65 | 2.2 | 850 | na. |
Estonia | 1.6 | 4.5 | 1.4 | 31 | 1.0 | 0.63 | 1.5 | 938 | n.a. |
Baltic- states | 7.9 | 17.5 | 7.4 | 43 | 5.0 | 0.63 | 6.0 | 757 | n.a. |
CEEC- 10 | 105.5 | 107.7 | 60.6 | 56 | 42.3 | 0.40 | 188.3 | 1786 | n.a. |
EU-15 | 369.7 | 323.4 | 138.1 | 34 | 77.1 | 0.21 | 5905.1 | 15927 | 15879 |
CEEC/EU | 29 % | 33 % | 44 % | 55 % | 3 % | 11 % |
Source: EU Commission DG VI (1995) & Schneider (1995)
The importance of agriculture during transition declined, in particular due to falling prices and to production levels. Employment rate has quite a different pattern: as a "buffer" on the labor market it even increased in some countries (Romania, Bulgaria, also Poland and Slovenia). As a consequence still an important part of labor force is employed in agriculture and with 9,5 million agricultural workers it exceeds agricultural labor force in EU-15 (8,2 million). Productivity of agricultural workers in CEEC-10, measured in terms of GDP per employee, is one third of the average productivity per employee in EU countries. Low productivity is a sign of a still important reservoir of labor force in agriculture. However this situation will tend to evaluate in accordance with development process.
Food in many CEEC still represents the most important part of household expenses (40 - 60% in the Balkanic and Baltic states, 30% in CEFTA); a process which diminishes the range of possibilities for the producers to increase food prices.
Farm structure of CEEC agriculture
Before the process of economic transition began, agricultural land was mainly in the hand of agricultural production cooperatives and of state farms. The only two exceptions were Poland and Slovenia, where traditionally family farms were kept but they were in many respects discriminated against. In all CEEC in general households were with an agricultural production intended for self consumption purposes only.
Table 2. Agriculture in the national economy in the CEEC and EU
Agric. area | Agric. production | Agric. employment | Agric. trade | Food exp. | |||||
(106 ha) | (% total) | (109 ECU) | (% GDP) | (000) | (% tot. empl.) | (% tot. exp.) | (% tot. imp.) | (% hh. income) | |
Poland | 18.6 | 59 | 4.648 | 6.3 | 366 1 | 25.6 | 12.2 | 11.1 | 30 |
Hungary | 6.1 | 66 | 2.068 | 6.4 | 392 | 10.1 | 21.8 | 7.4 | 31 |
Czech Rep. | 4.3 | 54 | 0.871 | 3.3 | 271 | 5.6 | 7.7 | 9.6 | 32 |
Slovakia | 2.4 | 49 | 0.512 | 5.8 | 178 | 8.4 | 5.9 | 9.3 | 38 |
Slovenia | 0.9 | 43 | 0.250 | 4.9 | 90 | 10.7 | 4.7 | 8.2 | 28 |
CEFTA+ | 32.3 | 58 | 8.349 | 5.5 | 4592 | 22.1 | |||
Romania | 14.7 | 62 | 4.500 | 20.2 | 3537 | 35.2 | 6.8 | 9.9 | 60 |
Bulgaria | 6.2 | 55 | 1.131 | 10.0 | 694 | 21.2 | 20.7 | 10.6 | 48 |
Balkan | 20.9 | 60 | 5.63 1 | 18.0 | 423 1 | 32.9 | |||
Lithuania | 3.5 | 54 | 0.259 | 11.0 | 399 | 22.4 | 12.8 | 10.8 | 58 |
Latvia | 2.5 | 39 | 0.232 | 10.6 | 229 | 18.4 | 45 | ||
Estonia | 1.4 | 31 | 0.266 | 10.4 | 89 | 8.2 | 11.0 | 16.7 | 39 |
Baltic states’ | 7.4 | 43 | 0.757 | 10.7 | 19.4 | ||||
CEEC- 10 | 60.6 | 56 | 14.700 | 7.8 | 9540 | 26.7 | |||
EU-15 | 138.1 | 43 | 208.800 | 2.5 | 8190 | 5.7 | 8 | 9.5 | 22 |
Source: EU Commission DG VI (1995) & Schneider (1995)
After the first phase of transition the process of restitution and privatization of land is still going on. Concepts between countries are not comparable, this is shown by the data below. It is obvious that there is a persistent process of formation of trimodal farm structure:
- large enterprises, previous state farms and cooperatives, which are now organized as business firms and modern cooperatives; they are smaller and more efficient than before;
- bigger family farms with the organization of production similar to that of American or Australian farms; crop production and extensive form of animal production prevail;
- small agricultural households and small part time farms, involved in production and in production for self consumption for local markets.
The pace of further changes will depend mostly on the velocity of establishing active land markets, and on the ability to overcome discrepancies in the restitution processes.
Table 3. Farm structure in CEEC-10
Share in total agricultural area (%) | ||||||
cooperatives | state farms | private farms | ||||
pre-transition | current | pre-transition | current | pre-transition | current | |
Poland | 4 | 4 | 19 | 18 | 77 | 78 |
Hungary | 80 | 55 | 14 | 7 | 6 | 38 |
Czech Rep. | 61 | 48 | 38 | 3 | 1 | 49 |
Slovakia | 68 | 63 | 26 | 16 | 6 | 13 |
Slovenia | 8 | 7 | 92 | 93 | ||
Romania | 61 | 35 | 14 | 14 | 25 | 51 |
Bulgaria | 41 | 90 | 40 | 10 | 19 | |
Lithuania | 35 | 91 | 1 | 9 | 64 | |
Latvia | 17 | 96 | 2 | 4 | 81 | |
Estonia | 33 | 96 | 4 | 67 | ||
Average size (ha) | ||||||
cooperatives | state farms | private farms | ||||
pre-transition | current | pre-transition | current | pre-transition | current | |
Poland | 335 | 400 | 3140 | 2000 | 6.6 | 6.7 |
Hungary | 4179 | 1702 | 7138 | 1976 | 0.3 | 1.9 |
Czech Rep. | 2561 | 1430 | 6261 | 498 | 4.0 | 16.0 |
Slovakia | 2654 | 1665 | 5162 | 2455 | 0.3 | 1.0 |
Slovenia | 470 | 303 | 3.2 | 4.1 | ||
Romania | 2274 | 170 | 5001 | 2002 | 1.5 | 1.8 |
Bulgaria | 750 | 13000 | 1100 | 0.4 | 0.6 | |
Lithuania | 450 | 2773 | 124 | 0.5 | 2.6 | |
Latvia | 706 | 3000 | 547 | 0.5 | 5.8 | |
Estonia | 567 | 3500 | 0.5 | 2.1 |
Source: EU Commission DG VI (1995) & Schneider (1995)
Livestock production in transition
In most CEEC agrisultural production decreased drastically afier 1989. With the exception of Romania and Slovenia, the total agricultural production is about one third to one fourth lower in comparison with the pre-transition period. The decline was most obvious in animal production. An important turn around was observed in 1994 - first in crop production. The causes for these changes are varied, from market breakdowns, declining demand, falling prices, inflation, abolishment of subsidies, inefficient food industry and market channels to growing input prices. Outstanding crisis in animal production is caused by the fact that the consumption of products of animal origin (of meat in particularly) was extremely high compared to average income, in Communist era. Investments were at least partially financed by the State, inputs were subsidized, some farms were too big with low efficiency of labor and in capital utilization. This is particularly true for state owned farms, where changes in economic conditions were most painful. As a consequence, the importance of crop production versus animal production has increased.
Table 4. Gross agricultural production in CEEC-I 0 (real index, 1989= 100)
Animal production | |||||
1990 | 1991 | 1992 | 1993 | 1994 | |
Poland | 94.2 | 94.1 | 90.2 | 78.8 | 81.6 |
Hungary | 99.8 | 84.2 | 74.4 | 66.6 | 60.0 |
Czech Rep. | 96.6 | 83.9 | 77.2 | 71.4 | 67.6 |
Slovakia | 96.2 | 79.9 | 69.4 | 62.6 | 62.6 |
Slovenia | 102.2 | 105.5 | 96.4 | 97.3 | 96.5 |
Romania | 102.1 | 98.2 | 87.9 | 90.5 | 91.3 |
Bulgaria | 95.4 | 77.7 | 69.3 | 59.6 | 48.3 |
Lithuania | 95.6 | 85.5 | 69.9 | 58.9 | 50.7 |
Latvia | n.a. | n.a. | n.a. | n.a. | na. |
Estonia | 92.0 | 82.8 | 65.5 | 52.3 | n.a. |
Source: EU Commission DG VI (1995) & Schneider (1995)
A decline in animal production is even more apparent if we take into account the number of animals by species. The decline was most evident as regards the number of cattle herds and sheep flocks (40% in average, up to 80% for sheep in Poland), and less obvious the total number of cows (approx. 20%). This process is most painful in Baltic States as they were previously oriented towards the Russian market. In comparison with EU- 15, CEEC keeps a relatively high number of pigs (40% of current number in EU- 15).
Table 5. Evolution of livestock production in CEEC-10 (number of animals in 000)
Cattle | cows | Pigs | Sheep | ||||||
1989 | 1994 | 1989 | 1994 | 1989 | 1994 | 1989 | 1994 | ||
Poland | 10391 | 7270 | 4885 | 3866 | 18835 | 17422 | 4409 | 891 | |
Hungary | 1690 | 999 | 568 | 420 | 8327 | 5001 | 2215 | 1252 | |
Czech Rep. | 3481 | 2161 | 1248 | 830 | 4685 | 407 1 | 399 | 196 | |
Slovakia | 1594 | 993 | 568 | 386 | 2698 | 2179 | 648 | 411 | |
Slovenia | 546 | 478 | 243 | 210 | 576 | 591 | 24 | 20 | |
CEFTA+ | 17702 | 11901 | 7512 | 5712 | 35121 | 29264 | 7695 | 2770 | |
Romania | 6416 | 3597 | 1704 | 1500 | 14351 | 9262 | 16210 | 11499 | |
Bulgaria | 1615 | 750 | 648 | 419 | 4132 | 2071 | 9045 | 4439 | |
Balkan | 803 1 | 4347 | 2352 | 1919 | 18483 | 11333 | 25255 | 15938 | |
Lithuania | 2435 | 1384 | 850 | 678 | 2708 | 1196 | 105 | 40 | |
Latvia | 1472 | 551 | 543 | 312 | 1555 | 501 | 197 | 86 | |
Estonia | 819 | 463 | 300 | 227 | 1099 | 424 | 100 | 50 | |
Baltic states | 4726 | 2398 | 1693 | 1217 | 5359 | 2121 | 402 | 176 | |
CEEC-10 | 30459 | 18646 | 11557 | 8848 | 58963 | 42718 | 33352 | 18884 | |
% EU | 35 | 24 | 32 | 26 | 58 | 39 | 33 | 19 | |
EU-15 | 85845 | 78747 | 36009 | 33617 | 101841 | 110937 | 101439 | 97753 |
Source: EU Commission DG VI (1995) & Schneider (1995)
Figure 1. Evolution of livestock production in CEEC-10 (relative indicators)
Average production per animal is in most CEEC lower than in EU-l 5. The highest average level of production is being found in Hungary, Czech Republic, Slovakia and in the Baltic States. Average milk yield per cow is presented in the table below. Similar outputs are common also in previous state farms in Poland and Slovenia. In most countries the average production per animal declined after 1989 due to problems related to input supply, reorganization of farms and as a consequence of the difficult economic situation. It is interesting to note that not only state dairy farms, but also Sloven pig and beef production units achieved a production per animal similar to that in the most developed Western European countries (e.g., average milk yield: 6000 kg milk per cow for a11 farms).
Table 6. Milk yield in CEEC-10 (yield per cow, kg/year)
1989 | 1994 | |
Poland | 3358 | 3083 |
Hungary | 5043 | 4762 |
Czech Rep. | 4064 | 4057 |
Slovakia | 3647 | 2253 |
Slovenia | 2473 | 2676 |
CEFTA+ | 3595 | 3275 |
Romania | 1950 | 2000 |
Bulgaria | 3523 | 2709 |
Balkan | 2363 | 2155 |
Lithuania | 3808 | 2448 |
Latvia | 3637 | 3003 |
Estonia | 4252 | 3401 |
Baltic states | 3832 | 2768 |
CEEC - 10 | 3382 | 2960 |
EU - 15 | 4562 | 5156 |
Source: EU Commission DG VI (1995) & Schneider (1995)
Agricultural livestock policy goals and measures
After the first very turbulent years, i.e., the period immediately after the reform, more effort to stabilize agriculture was observed in all CEEC. Agricultural intervention measures were different from country to country. Some countries (mostly CEFTA) have gradually built up an intervention system similar to the EU Common Agricultural Policy whereas some others still administrative price and market channel control. CEFTA countries protect first of all their staple commodities (cereals, sugar, milk, beef and pork), but this support is from reaching the level of protectionism observed in the EU or EFTA countries. With a PSE of 35% (Producer Subsidy Equivalent, OECD Protectionism measures) Slovenia has the highest level of protection; other CEFTA countries have a PSE between 10 and 25%.
Table 7. Intervention prices for livestock products in CEFTA countries in 1994
Beef | Pork | Milk | ||||
(ECU/t) | (% EC) | (ECU/t) | (% EC) | (ECU/t) | (% EC) | |
Poland | 1110 | 30 | 1261 | 87 | 28 | |
Hungary | 1609 | 44 | 1050 | 201 | 65 | |
Czech Republic | 1566 | 43 | 171 | 55 | ||
Slovakia | 1546 | 42 | 179 | 58 | ||
IEU | 3680 | 310 |
Source: EU Commission DG VI (1995) & Schneider (1995)
Other CEEC have prices that are below the world level and applying PSE criteria have no or even negative protection. This is quite easy to understand, if one knows that the most important aim of the agricultural policy is the protection of citizens in towns. The state has preserved its right to control the prices and the food industry. Exports of food and agricultural commodities are restricted through taxes or prohibitions measures.
Many CEEC support agriculture through input subsidies. Agricultural support is mostly given in the form of subsidized loans. Clearly, the intervention is limited by low agricultural budgets. In many countries a special problem is the poorly developed land banking system, which cannot begin to operate due to existing discrepancies in land markets and the low profitability of agriculture. Some countries such as the Czech Republic, Slovakia and Slovenia have established special programs for disadvantaged areas.
Prices of agricultural products in CEEC are far below those in EU, with important differences between countries. In Romania, in Bulgaria and to some extent also in the Baltic States, prices are lower than on the world market and, as such, their evolution is below that of long term production costs. Comparatively the highest prices are in Slovenia, where some farm products are even more expensive than in the EU.
In CEFTA countries cereals are cheaper than in the EU, but prices of pork and poultry are at the EU level; it shows the low efficiency level of white meat production in this area. Milk and beef prices in CEFTA countries are, in contrast with pork prices, below world price levels, and it is difficult to cover material costs. Beef is to some extend a by-product of multi-purpose cattle breeds.. Specialized beef breeds in CEEC are scarce.
Table 8. Farm gate prices for livestock products in CEEC- 10, I994
Milk | Beef | Pork | ||||
(ECU/t) | (% EC) | (ECU/t) | (% EC) | (ECU/t) | (% EC) | |
Poland | 103 | 33 | 1240 | 40 | 1320 | 103 |
Hungary | 220 | 70 | 1630 | 52 | 1260 | 98 |
Czech Rep. | 172 | 54 | 1850 | 59 | 1200 | 94 |
Slovakia | 164 | 52 | 1580 | 50 | 1130 | 88 |
Slovenia | 292 | 92 | 2510 | 80 | 1710 | 134 |
Romania | 179 | 57 | ||||
Bulgaria | 114 | 36 | 750 | 24 | 680 | 53 |
Lithuania | 66 | 21 | 680 | 22 | 1040 | 81 |
Latvia | 83 | 26 | 560 | 18 | 980 | 77 |
Estonia | 83 | 26 | 360 | 12 | 550 | 43 |
EU | 316 | 3130 | 1280 |
Source: EU Commission DG VI (1995) & Schneider (1995)
The detailed situation and outlook of Milk, beef and pork market
Starting points
Some trends and scenarios of the expected development for three key animal product markets (milk, beef and pork) - for the period between 1989 and 2000 are being presented here. The possible evolution is outlined by applying the FAO food balance models. This was done by the specialists of DG VI EU-Commission (1995) with the help of domestic experts (including the author of this paper). Models of food balances are made up by using the production and the foreign trade data set, consumption being a dependent variable. Data concerning production and consumption are presented in the tables hereafter, together with, for the sake of analysis, a balance between the two data sets. It shows which country is a net importer or net a exporter of animal commodities. These data could also be used for a simple assessment of meat consumption per capita.
Which were the starting points for an assessment of market(s) development? The authors took into account the following aspects:
- the general economic status and future prognosis,
- the achieved level of reform in agriculture and in up- and down-stream sectors, access to capital and loans, clarification of land ownership,
- levels and structure of inputs used in agriculture and the process of productivity evolution
- the future agricultural and food protectionism, foreign trade measures, direct support, budget possibility, GATT conditions,
- the expected developments on the international agricultural markets
- demographic trends.
Positive trends in the economic development for the CEFTA and Baltic states between 4( and 5%) were projected (lower in Hungary and in Slovakia). For Romania and Bulgaria a slower development was assumed. Real income was expected to raise, and also food demand in parallel with it. The land reform will be completed at the end of the period. Compared with 28 the mid 90’s, agricultural support will not increase strongly: limitations in this respect will be imposed by budget constraints and in connection with the obligations resulting from the GATT agreement. Some countries (CEFTA in particular) will continue to adjust their policy for future membership in EU. Despite some other possible conclusions it implies systematic investments in agricultural infrastructure, including stabilization of up- and down-stream industries. Some positive evolution signals have been already observed. Agricultural producers will improve the utilization of inputs, and this will, in most countries, result in the increase of production. The price gap between the CEEC and the EU will be reduced further. The demand is likely to rise faster than supply.
Milk production
The CEFTA and the Baltic States are traditional net milk exporters. The most important products are butter, milk powder and cheese. Due to the reduction of the number of dairy cows and to falling milk yields, supply is smaller than demand. In the mid nineties the situation stabilized and milk yields started rising again.
Table 10. Milk food balances
Production (000 t) | Domestic use (000 t) | Balance (000 t) | |||||||
1989 | 1994 | 2000 | 1989 | 1994 | 2000 | 1989 | 1994 | 2000 | |
Poland | 16404 | 11920 | 14000 | 15741 | 12320 | 13825 | 663 | -400 | 175 |
Hungary | 2862 | 2000 | 2670 | 2806 | 2060 | 2448 | 56 | -56 | 222 |
Czech Rep. | 4991 | 3197 | 3014 | 3570 | 2589 | 2764 | 1421 | 608 | 250 |
Slovakia | 2055 | 820 | 1276 | 1446 | 1068 | 1166 | 609 | -248 | 1110 |
Slovenia | 601 | 562 | 673 | 437 | 486 | 495 | 164 | 76 | 178 |
CEFTA+ | 26913 | 18499 | 21633 | 24000 | 18522 | 20699 | 2913 | -23 | 935 |
Romania | 3323 | 3000 | 3100 | 3329 | 3019 | 3150 | -6 | -19 | -50 |
Bulgaria | 2135 | 1135 | 1575 | 2135 | 1135 | 1530 | 0 | 0 | 45 |
Balkan | 5458 | 4135 | 4675 | 5464 | 4154 | 4680 | -6 | -19 | -5 |
Lithuania | 3235 | 1660 | 2209 | 2300 | 1247 | 1611 | 935 | 413 | 598 |
Latvia | 1976 | 937 | 1187 | 1215 | 969 | 1148 | 760 | -32 | 39 |
Estonia | 1277 | 772 | 883 | 950 | 667 | 767 | 327 | 105 | 116 |
Baltic states | 6488 | 3369 | 4279 | 4465 | 2883 | 3526 | 2022 | 486 | 753 |
CEEC-10 | 38859 | 26003 | 30587 | 33929 | 25560 | 28905 | 4930 | 443 | 1683 |
EU-15 | 127032 | 120002 | 19431 | 119002 | 113957 | 112634 | 8030 | 6045 | 6797 |
Source: EU Commission DG VI (1995) & Schneider (1995)
Milk production is likely to remain one of the most protected sectors in the CEEC. The issue of milk surpluses will not be solved, although, the 1989 level of production is not likely to be reached again. The only exception is probably Slovenia.
Beef
Table 11. Beef food balances
Production (000 t) | Domestic use (000 t) | Balance (000 t) | |||||||
1989 | 1994 | 2000 | 1989 | 1994 | 2000 | 1989 | 1994 | 2000 | |
Poland | 637 | 4.50 | 550 | 691 | 464 | 593 | -54 | -14 | 15.0 |
Hungary | 114 | 80 | 80 | 91 | 95 | 128 | 23 | -15 | 12.5 |
Czech Rep. | 272 | 184 | 215 | 254 | 165 | 176 | 18 | 19 | 17.0 |
Slovakia | 147 | 73 | 68 | 79 | 64 | 70 | 68 | 9 | 12.7 |
Slovenia | 50 | 35 | 57 | 38 | 42 | 47 | 12 | -7 | 24.0 |
CEFTA+ | 1219 | 822 | 970 | 1153 | 830 | 1014 | 67 | -8 | 15.3 |
Romania | 220 | 266 | 306 | 252 | 271 | 270 | -32 | -5 | 12.0 |
Bulgaria | 123 | 97 | 97 | 138 | 106 | 106 | -15 | -9 | 12.5 |
Balkan | 343 | 363 | 403 | 390 | 377 | 376 | -47 | -14 | 12.1 |
Lithuania | 224 | 120 | 181 | 93 | 82 | 89 | 131 | 38 | 24.0 |
Latvia | 129 | 68 | 7 | 67 | 68 | 66 | 62 | 0 | 26.0 |
Estonia | 75 | 28 | 65 | 40 | 42 | 41 | 35 | -14 | 26.0 |
Baltic states | 428 | 216 | 320 | 199 | 192 | 196 | 228 | 24 | 25.1 |
CEEC-10 | 1990 | 1491 | 1693 | 1742 | 1399 | 1586 | 248 | 2 | 15.8 |
EU-15 | 8298 | 7857 | 8338 | 8136 | 7725 | 8191 | 162 | 132 | 21.6 |
Source: EU Commission DG VI (1995) & Schneider (1995)
If the projections for milk production turn out to be correct, then one may expect that due to the multi-purpose nature of cattle production, beef production will also recover from the current low level of total production. Some countries apply systematic crossbreeding with beef breeds. It is also expected that in some countries (Poland and Hungary) the demand will exceed supply; it increase net import. An important point to mention here is the reorientation from animal husbandry into crop production.
The production will increase significantly in Romania and in the Baltic States, but before the year 2000 the production level of 1989 will not be achieved.
Pork production
The CEEC citizens like to consume pork. In Poland, Hungary and in the Czech Republic pork consumption per capita is even higher than in EU. The extremely high consumption level in Hungary does not reflect the real situation, since it includes a high percentage of exported pork products. According to EU experts, the supply in CEFTA countries (particularly in Poland) will stay far behind the demand. This region will remain, for some time a net importer of pork.
Table 12. Pig meat food balances
Production (000 t) | Domestic use (000 t) | Balance (000 t) | |||||||
1989 | 1994 | 2000 | 1989 | 1994 | 2000 | 1989 | 1994 | 2000 | |
Poland | 1854 | 1609 | 1785 | 1866 | 1705 | 1896 | -12 | -96 | -111 |
Hungary | 1014 | 600 | 699 | 882 | 598 | 714 | 132 | 2 | -15 |
Czech Rep. | 552 | 465 | 522 | 543 | 480 | 191 | 9 | -15 | 10 |
Slovakia | 274 | 172 | 186 | 232 | 177 | 76 | 41 | -4 | -5 |
Slovenia | 62 | 48 | 65 | 67 | 73 | 3389 | -5 | -25 | -11 |
CEFTA+ | 3756 | 2894 | 3257 | 3590 | 3033 | 715 | 166 | -139 | -132 |
Romania | 800 | 739 | 765 | 766 | 657 | 280 | 34 | 82 | 50 |
Bulgaria | 412 | 214 | 280 | 409 | 217 | 995 | 3 | -3 | 0 |
Balkan | 1212 | 953 | 1045 | 1175 | 874 | 995 | 37 | 79 | 50 |
Lithuania | 250 | 83 | 110 | 149 | 86 | 9 | 101 | -3 | I1 |
Latvia | 154 | 54 | 77 | 96 | 66 | 77 | 58 | -12 | 0 |
Estonia | 125 | 37 | 52 | 73 | 31 | 36 | 53 | 6 | 16 |
Baltic states | 529 | 174 | 239 | 318 | 183 | 212 | 211 | -9 | 27 |
CEEC-10 | 5497 | 402 1 | 4541 | 5083 | 4090 | 4596 | 415 | -69 | -55 |
EU-15 | 15238 | 16010 | 6569 | 14676 | 15029 | 16069 | 562 | 981 | 500 |
Source: EU Commission DG VI (1995) & Schneider (1995)
Table 13. Domestic use per capita (kg)
Beef | Pork | |||||
1989 | 1994 | 2000 | 1989 | 1994 | 2000 | |
Poland | 18.2 | 12.0 | 15.0 | 49.1 | 44.2 | 48.0 |
Hungary | 8.8 | 9.2 | 12.5 | 85.0 | 58.2 | 70.0 |
Czech Rep. | 24.5 | 16.0 | 17.0 | 52.4 | 46.4 | 49.2 |
Slovakia | 14.9 | 12.0 | 12.7 | 44.0 | 33.0 | 34.7 |
Slovenia | 20.0 | 21.4 | 24.0 | 5.0 | 37.6 | 38.5 |
CEFTA+ | 18.7 | 12.9 | 15.3 | 57.8 | 46.5 | 51.9 |
Romania | 10.9 | 12.0 | 12.0 | 33.0 | 28.9 | 31.8 |
Bulgaria | 15.4 | 12.5 | 12.5 | 45.6 | 25.7 | 33.8 |
Balkan | 12.5 | 12.1 | 12.1 | 37.4 | 28.1 | 32.4 |
Lithuania | 25.0 | 22.0 | 24.0 | 40.0 | 23.0 | 27.0 |
Latvia | 25.0 | 26.5 | 26.0 | 36.0 | 26.0 | 30.1 |
Estonia | 25.0 | 26.5 | 26.0 | 46.0 | 20.0 | 23.0 |
Baltic states | 25.0 | 24.6 | 25.1 | 40.2 | 23.6 | 27.4 |
CEEC-10 | 18.0 | 14.3 | 15.8 | 52.0 | 41.5 | 46.5 |
EU-15 | 22.2 | 20.8 | 21.6 | 40. I | 40.5 | 42.4 |
Source: EU Commission DG VI (1995) & Schneider (1995)
Problems of a further development of livestock production in CEEC, a general overview
It is obvious that due to non-negligible production potential animal production will increase again. Although on the way of recovering, numerous structural problems will reduce its pace.
Among others, the following factors seem to be the most important, i.e.:
- Insufficient access to capital. Despite the huge amount of investments necessary to carry out the production, there is an important deficit in capital for further development. Due to poor economic situation self-financing is not sufficient, budget funds for public support are very limited. Due to low profitability animal production is not attractive to private investors. Unresolved ownership problems only make financing problems more acute..
- Agricultural structural deficits. Agriculture plays the important role of social buffer in some countries in transition. Even if the additional small farms which are established, and part-time farming together with other sources of income contribute to stabilizing social peace in rural areas. This situation complicates further the process of modernization. Rural population is mostly overaged, poorly educated and is not prepared to meet the market challenges.
- Structural deficits in up- and down-stream industries. Livestock production depends strongly on the accompanying industry. Food industry in many countries is in economic crisis, there is deficiency of know-how and a lack of foreign investors. International competitiveness is poor; despite the low input prices CEEC are expected to support export on the world market.
The afore discussed issues above represent a never-ending story in CEEC. Solutions are usually in the "searching" stage, factual changes will likely occur in the long term. These problems will define and create further agricultural development (in particular in the livestock sector), at least for the next five to ten years. Knowledge, management, qualification and capital are dominant constraints for further development of animal production. These are also areas which need more and better defined international support.
By way of conclusions - some comments on future breeding strategies for CEEC
Cheap labor and land together with poor capital possibilities in CEEC do not enable the development of capital intensive animal production systems as it is the case in EU. There is no problem to save on labor and to produce with maximum capital input per animal. There is no money for investments in buildings and equipment, also the quality of human factor in many countries does not allow very intensive capital systems. Farm organization systems favor those which yield the highest (gross) income at given and very limited capital input. Variability of farm structure is an additional factor that justifies differences in farm organization.
Diversification is much higher than in EU. After a period of transition, almost all types of production units can be found in CEEC, from self-sufficient households, small part-time farms, traditional family farms, to modem partnerships, big cooperatives and livestock holdings.
Within any types of these one may find the whole spectrum of intensity, depending in particular on the above mentioned price limitations of production factors which could be defined by the number of animals per production unit or per ha. It is also quite possible that new very large livestock units will emerge, similar to those in USA, Chile, Brazil and Spain (Bichard, 1995). In CEEC these farms might be able to deliver large quantities of high quality beef meat or pork at very competitive prices. However, this is within the realm of pure theoretical discussion, since there is no capital available for necessary investments. It must be stressed here that ecological consciousness in CEEC is not as low as some policy makers in the West would like it to be.
Production factors (land, capital and labor) in CEEC have different costs, and above all price relationships between production factors is different from those in EU. The variability in farm structure is an additional factor to be kept in mind when trying to transfer business and agricultural policy solutions from West to East. Does this mean that breeding strategies in CEEC should be different from those in EU?
From the economic point of view it is necessary to offer the producer animals of appropriate selection or breed, giving him thus the possibility of achieving the desired economic objectives. Due to pronounced variability, requirements are quite different. Specially small breeders in CEEC would need more vigorous animals, less demanding and better adapted to the environment, whether these are cattle, sheep or pigs. This can be achieved with domestic breeds by applying breeding techniques through appropriate fertile dairy or meat breeds. Small family farms or households prefer multi-purpose to specialized ones, as they primarily have to meet "self-sufficiency" objectives and accordingly to supply farm surpluses local markets only with farm surpluses. Highly specialized breeds in less favorable breeding conditions do not give the proper return, which could be expected given their reputation. Exceptions only prove the rule.
It is difficult to give a universal answer to the question concerning the production orientation of "big units". It strongly depends on farm organization and skill of breeders.
When production conditions are satisfied then theory would recommend using specialized breeds. This is supported also by domestic price relationships, favoring milk and pork versus beef and sheep. In this light, it is argued that multi-purpose breeds of cattle have some disadvantages. An important obstacle to expand the production of meat cattle breeds could be found at socio-economic level. These are new systems, the introduction of which might be supported by specific technological solutions; it requires budget support and guaranteed supply of breeding animals ("active market"). Such production should be financially attractive, however, usually it is not the case. Despite other "explanations and promises", it mainly needs huge initial capital investments if the target of good breeding herd is to be met in practice.
Everlasting problem of access to capital! In pig production some big farm systems are quite successful (some farms in Slovenia, Hungary). Breeding strategies for these systems are formulated by imitating modern pig companies in EU, less emphasis being given to meat quality, which however might be adequate for current product demand.
Let us try to answer the question regarding the necessary distinction between breeding strategies in EU and CEEC. Selection breeding requirements of large and medium livestock farm units, which practice both intensive and extensive production, can be reached by emulating breeding strategies comparable to those valid in EU. It is assumed that the difference in demand (including its structure) between EU and CEEC market is not too "high", particularly when considering the likely unification of both markets (only timing is uncertain).
This is true in particular for pig production. The prevailing economic conditions in cattle production lead however to sequential, long term substitution of specialized breeds by multipurpose ones. Is this appropriate also for a small farming structure? It is obvious that this is the problem of a dual structure. My personal opinion is that a solution can only be reached if a careful selection of national breeding strategies is adopted. Where they do not exist, the system should offered much more diversified breeding strategies than it as has been the case till now (i.e., within one species and for a particular country). Due to initial costs for setting up selection work/programs, instead of current uniform selection program (if this is the case, most of the production financial requirements for new program(s) could be partially covered from abroad or from common CEEC programs. We want to emphasize again how important it is to get rid of the illusion that by applying one selection program and using one type of animal, it is possible to meet the requirements of a11 production systems, their related objectives and the skill of breeders in CEEC. It should be pointed out that a strong "economic interaction" exists between genotype and environment which animal breeders aim at abolishing. Perhaps this may be solved only by supporting the pluralism in selection programs.