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Technology adoption in French agriculture and the role of financial constraints

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Abstract

Successive CAP reforms have increased the exposure of European agriculture to market forces. As a result, farmers have become preoccupied with their competitiveness and have progressively adopted best practices. However, these long-run technological adjustments could be slowed down by eventual short-run financial constraints. This contribution measures the role of these financial constraints on the catching-up component of total factor productivity for a panel of French farmers in Nord-Pas-de-Calais region during 1994-2001. For TFP estimates based on non-parametric distance functions, the second stage econometric results indicate that the technological adaptation is significantly conditioned by financial constraints.

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