Convergence in the agricultural incomes: a comparison between the US and EU

Abstract

In this paper we compare the changes in farm incomes in EU regions and US States between1989 and 2002. The aim of this comparative analysis is highlight the patterns of convergence or divergence and how they differ over time. We use two recent analytical instruments: non-stationary panel analysis and dynamic distribution analysis. Both tools overcome the problems involved in using standard cross-section analysis. The results of the non-stationary panel analysis show that the EU regions are converging, and that family farm income per hectare is converging faster than net added value. In the US states the analysis shows that substantial differences in farm income persist, and there are no evident signs of convergence. In brief, there were more changes in farm income in the EU between and 1989 and 2002 than in the USA.