Economic eficiency of cereal crops production by application of PAM

Abstract

By applying policy analysis matrix we will determine how efficient the farmers in Croatia in this particular production are and how they deal with negative initiatives in production and marketing. In the Republic of Croatia cereal crops make up for more than two thirds of the total sowed area. Maize is the dominant cereal crop ; it covers 56% of total sowed area. Wheat has a share of 33% of total sowed area and has average production growth of 0, 89% per year (Loncaric et al. 2006). Achieved average yield between 1995 and 2004 for wheat has been 3, 95 t/ha (tons per hectare), for maize 5, 28 t/ha, barley 3 t/ha, oats 2.5 t/ha and rye 2.2 t/ha. The cereal production is characterized by cyclic decrease of growth and fall, which indicates insufficient exploitation of production potential and decrease of competitive ability. Till 1998 cereal crops production, especially wheat production, as the most important bread grain, was surplus thanks to significant customs protection and import ban, which made it possible to keep a high wheat price on the market. Due to greater integration of Croatian agriculture, i.e. entering the WTO and signing the Stabilization and Association Agreement and the Protocol 7, have caused decrease in wheat price and increase in grants.