What is it about?
It is usuallyassumed that within the agricultural sector, agglomeration effects are limited but differ by type of production and may also change over time. However, recent studies highlight the relevance of agglomeration economies in agriculture. The pork sector is one of the best examples of industrialized agriculture, with strong input–output linkages to the manufacturing sector. The farm structure of the pork industry is strongly affected by economies of scale. An increase in the concentration of global hog production is accompanied by spatial concentration of pork production. Previous studies have concentrated primarily on North-American and Western European countries, whilst the research on the situation in Central-Eastern European countries is limited. The aim of paper is to investigate agglomeration effects on the Hungarian hog sector.
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Why is it important?
Due to the dual nature of the structure of the Hungarian pork industry, we investigate agglomeration effects for individual and corporate farms separately. Results indicate that pork production by these farm groups is affected by different factors in different ways. We distinguish two different ‘worlds’ within the Hungarian pork industry. The ‘introvert world’ of individual farms is very sensitive to agglomeration effects and spatial externalities. The ‘extrovert world’ of corporate farms is more resistant to agglomeration economies and spatial externalities.
Perspectives
Dual structure of the Hungarian pig sector implies that more targeted policy necessary to improve the competitiveness of Hungarian pig production. Different needs if smallscale and large-scale farms also reveal that one size fits all approach may lead to further divergency between two sub-sectors. The existence of agglomeration in the small-scale sector highlights that spatially targeted collective actions require to promote individual farms.
Professor Imre Ferto
Centre for Economic and Regional Studies, Hungarian Academy of Sciences: Budapest
Read the Original
This page is a summary of: Structural change and agglomeration in the Hungarian pork industry, European Planning Studies, November 2019, Taylor & Francis,
DOI: 10.1080/09654313.2019.1687652.
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