A Comprehensive Study on the Competitiveness of Governing Structures of Bulgarian Farming

Abstract

The farm is an abstract category in Economic theory for describing agents managing farming activity, while the real governing structures are farms of different juridical types – physical persons, sole traders, cooperatives, ago=companies, etc. Most of the time, farm’s competitiveness is inadequately assessed through technical and accountancy efficiency, factors’ productivity, profitability, market shares, etc. because critical governance aspects are ignored. This article incorporates the interdisciplinary New Institutional Economics assumptions and principles and tries to give new insights on the real competitiveness of economic organizations in modern agriculture.  It suggests a holistic framework for assessing farm’ competitiveness taking into account economic, financial, and governance efficiency, and evaluates absolute and comparative competitiveness of governing structures of Bulgarian farming. The novel assessment system includes four pillars, four criteria, 17 particular, and 5 integral indicators. The first-in-kind evaluation, based on survey data, found that the competitiveness of Bulgarian farms is good. The competitiveness of cooperatives is highest, followed by corporations and associations, sole traders, and physical persons. Critical for competitive positions of farms are: low productivity, income, financial security, and adaptability to natural environment, where public support and farms’ management strategies should be directed. Large shares of the country’s farms have low competitiveness, and if measures are not taken to improve management, restructuring, state support, etc., many farms will cease to exist in the near future. In some cases, other characteristics of governing structures like size, specialization, market orientation, and ecological location, are critical for determining competitiveness level. The suggested and successfully tested framework for assessing the competitiveness of farms should be further improved and applied more widely and periodically in the country and internationally. The precision and representativeness of the information used should also be improved by increasing the number of surveyed farms and their important characteristics. The later requires close cooperation with producer organizations, national agricultural advisory service, and other interested parties as well as extending and improving the system for collecting agro-statistical information in the country and the EU.