The Use of Agricultural Services in European Union Regions Differing in Selected Agricultural Characteristics

Abstract

Agricultural services, understood as the rental of machinery and equipment with appropriate labor, are one of the three types of production services in agriculture distinguished by European Union legislation. The aim of this paper is to identify clusters of regions in the European Union that differ in the level of use of agricultural services on farms and in selected characteristics related to production potential, labor input, and type of agricultural production. For this purpose, Ward’s method, from the group of hierarchical agglomerative cluster analysis methods, was used. Based on data on farms using agricultural services in 124 regions of the European Union, six clusters were formed. The study showed that agricultural services substitute for labor inputs in intensive agricultural production conditions, but in a situation with good technical equipment, farms may more often choose to employ hired workers. Such substitution does not occur in regions that are moderately and less well-equipped with machinery and equipment, because hired labor cannot completely replace the scarcity of machinery. The level of use of agricultural services is also related to the profile of the production carried out and the area of agricultural land, followed by the resources of land, capital, and labor. The level of economic development and historical background are also important.

Keywords

• agricultural services
• factor inputs
• regional differentiation