Impact of agricultural sector on the economic situation of NUTS III regions in the Czech Republic

Abstract

In all developed economies of the world there was, in the past, a significant decrease in the share of agriculture with regard to the Gross Domestic Product (GDP) and employment. However, it is still possible to find considerable differences between individual countries as well as between regions. The income of agricultural workers is traditionally lower, which subsequently leads to an outflow of population from the country into cities, and to further deterioration of the demographic and economic situation of the rural population. As adequate production of food and food self-sufficiency have been among the strategic priorities of national governments, macroeconomic policies make efforts to support agricultural production both at the national and international level. Therefore, the Common Agricultural Policy has been one of the oldest policies of the European Communities. However, this support increasingly deviates from direct support of production towards harmonic development and diversification of activities in rural regions. With regard to these facts, the authors attempt to identify the particular causal relations between selected indicators at the level of territorial units NUTS III – the regions of the Czech Republic, and to verify the actual existence or non-existence of these relations. Noticeable differences between regions have been found, measured by the share of the agricultural sector in the regional GDP and employment. Subsequently, the authors have identified a dropping tendency between the share of agricultural employment and average income. On the other hand, no relations of dependency have been found between the GDP and agricultural employment and registered unemployment. Neither has the relation between agricultural employment and the GDP per inhabitant been identified as statistically significant. However, there is a high degree of dependence between the share of agricultural employment and the GDP per inhabitant generated in the agricultural sector, between the share of the country population (population density) and the GDP per inhabitant generated in the agricultural sector, and finally between the population density and the GDP generated by the agricultural sector in the particular region (Figures 6, 7, 8 and 9). It can be derived from these facts that their economic structure and demographic situation determine the variability among regions. In the future, these regions should receive aid targeted at the development of rural regions. Identification and statistical evidence of the problems of agriculturally-oriented regions is an important prerequisite for drawing funds from the European Communities programmes and for the establishment of effective macroeconomic policy at the national level. However, despite all the conclusions given above, it can be stated that at the present time agriculture apparently neither contributes to greater unemployment nor it lowers the efficiency of the economy measured by the region’s GDP.