The influence of producer prices on livestock production development in Croatia

Abstract

An aggregate indicator of the influence of producer prices on the whole of agricultural production in the Republic of Croatia for the period 1981-1997 shows that the prices of agricultural products did not determine the level of production in great measure. The coefficient of determination shows that only 41% of the change in agricultural production can be explained by changes in producer prices, and 59% by the influence of other factors. It is well known that a more significant influence on changes in some production levels is exerted by producer prices from the previous year or years. Shifted by one year, the influence of producer prices on production (the price in year X in relation with production in year X+l) is much more significant, so the coefficient of correlation for the period analysed is R=0.75 and the coefficient of determination is 0.55. The higher the producer price for the next year or period, the higher the level and quality of agricultural inputs consumed. This research shows that in the production of basic livestock products there exists no substantial relation between producer prices and changes in production level.