AGRICULTURAL PRODUCTIVITY, INFLATION AND FARMERS INCOME: A GRANGER CAUSALITY ANALYSIS
Authors: Nikolaos Apostolopoulos, Dimitrios Petropoulos, Zisis Mandanas
Abstract
Aim: This study aims to explore the relationships among agricultural productivity, inflation, and farmers' income in Greece over a period of 33 years.
Data: The analysis utilizes annual time-series data sourced from the Food and Agriculture Data Net-work, focusing on Gross Value Added (GVA) in agricultural production, the Producer Price Index (PPI) for agricultural products, and annual average farm household income (AFI).
Results: The Granger causality analysis reveals a bidirectional causal relationship between agricul-tural productivity and farmers' income. Additionally, a significant impact of productivity on inflation and inflation on income is observed, indicating that changes in agricultural production value precede variations in producer prices.
Conclusions: These findings highlight the complex interactions within the agricultural sector, sug-gesting that enhancing productivity can improve farmers' income while mitigating inflationary pres-sures. The study emphasizes the importance of targeted policies to foster sustainable agricultural growth and economic stability in rural communities.