Market Forces in Transition - an Empirical Analysis on Adjustment in Agricultural Production in the New BundesländerIn this paper the extent of market forces in the adjustment process of agricultural production in the New Bundesländer is quantified. Based on an elementary supply curve concept, the authors distinguish a price effect, a behaviour effect, and a technology effect. Considering eight agricultural products in the New Bundesländer, both the price effect and the behaviour effect are negative from -10 percent to -30 percent and -40 percent, respectively. The technology effect on the other hand would result in a production increase of up to more than 100 percent. A comparison with the actual development of supply in the New Bundesländer after 1989 shows that the driving market forces in the transition process are strongly influenced and biased by the institutional and agricultural policy framework. The elementary supply curve concept as used in the paper should be further developed to a comprehensive model of the transition process.
