Profitability Gaps and Convergence in Field-Crop Farms: A Decomposition for the Visegrad Countries, Austria, and Germany

This study investigates profitability gaps and convergence in field-crop farms across Austria, Germany, and the Visegrad countries, benchmarked against the EU27 average. Using harmonised Farm Accountancy Data Network data for 2013–2022 and a decomposition framework, profitability gaps are disaggregated into operational, financial, and fiscal components. The analysis reveals persistent cross-country disparities. Austria, Czechia and Hungary record above-average returns, while Germany, Poland, and Slovakia remain below. Operational components – revenues, costs, labour structures, and capital intensity – account for most cross-country differences, whereas financial and fiscal components play a minor role. Dynamic tests provide indicative evidence of partial convergence. Hungary maintains a comparative advantage, while Slovakia, initially the weakest, shows consistent signals pointing towards a catching-up process. The results suggest that harmonisation on its own is unlikely to eliminate profitability gaps; the paper’s policy relevance lies mainly in how it highlights the importance of improving operational efficiency and labour productivity, as well as the need to target investment support without reinforcing inefficient capital accumulation.