Variations in Farm Performance in Transitional Economies :Evidence from the Czech Republic

This paper revisits the literature on farm restructuring in the CEECs by analysing the variations in farm performance in the Czech Republic a decade after the start of the transition process. It identifies 7 clusters of farms that differ in their productivity and profitability using data from 1998 and 1999. The analysis reveals that the vast majority of farms are unprofitable, and there is no strong evidence that individual farms perform better than corporate farms. In fact, there are large numbers of individual farms that are loss-making on their agricultural activity with low factor productivity. Producer co-operatives and limited liability companies suffer from debts inherited from the reform process. Future restructuring is likely to occur in all clusters rather than affecting just corporate farms.