Agricultural Productivity, Inflation and Farmers Income: A Granger Causality Analysis
Agricultural Productivity, Inflation and Farmers Income: A Granger Causality Analysis

Author(s): Zisis Mandanas, Dimitrios Petropoulos, Nikolaos Apostolopoulos
Subject(s): Social Sciences, Economy, Business Economy / Management, Agriculture, Sociology, Evaluation research, Environmental interactions, Socio-Economic Research
Published by: Университет за национално и световно стопанство (УНСС)
Keywords: agricultural productivity; producer price Index; farm income; causality
Summary/Abstract: 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.

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