The production trends for vegetables and fruits in Greece and analysis of the competitiveness index Balassa (1996-2008)

Dimitrios P. Petropoulos

Abstract: The liberalization of international trade through the elimination of market boundaries between countries and the implementation of preferential trade agreements along with the development of globalization have contributed to the strengthening of competition which has been observed at a geographical and market sector level. Thus the measurement of competiveness has become a feld of analysis for both market stakeholder and institutions of economic policy. The analysis of competiveness based on individual factors such as cost, price or quality is not an adequate tool for predicting the effects of trade policy, either in terms of the state or a sector/business and their development process. The competitiveness of an economic sector, such as agriculture or food, focuses its interest on the level and changes in the trade balance or/and the industry performance. As a result, the main data from analyzing the competitiveness of an agricultural sector and individual products comes from trade balance figures. This study analyzes the competitiveness of key fruit and vegetable products of Greece in relation to the rest of the worlds applying the Revealed Comparative Advantage (RCA) index for the period 1981-2010. The evaluation of the comparative advantage of Greece based on the Balassa index is used to determine if a country has a RCA. The association between the development and the long-term competiveness of agriculture with shortterm factors, such as prices or input costs, is not regarded as particularly signifcant. Rather, what should be taken into consideration is productivity and organization at farm and state level. Besides quantity of products, the natural resources of areas and costeffective technologies, more attention is given to increase added value, quality, services they offer and other non-price factors. For a country like Greece, which is integrated into the European Union, a major international fnancial institution bearing a full-fledged open economy and thus, confronted with the developments of a changing international environment, the analysis of the competitiveness of individual sectors is always timely and necessary. The assessment of the competitiveness of the agricultural sector is used to show its strengths and weaknesses so that a framework of corrective actions can be developed, if needed, and suggestions for the future.

Keywords: agriculture; competitiveness; fruits; index Balassa; international competitiveness; vegetables

Date published: 2017-10-03