THE EUROPEAN SINGLE MARKET AND FACTOR INPUTS IN THE AGRICULTURAL SECTOR

The aim of this article is to assess how changes in national economies due to the introduction of the European Single Market will affect factor in-puts in farming. The background to this problem is the conflict of methods between partial and total analysis. Following concepts popular in Anglo-Saxon countries, which decree that problems relating to agriculture can only be realistically analysed within the framework of the national economy, the author reviews the necessity for such an approach to agricultural problems in Austria. It emerges that the content-related hypothesis formulated at the beginning of the article, according to which the boost to national economies expected from the Single Market will lead to significant changes in factor in-puts in the agricultural sector, can be confirmed: using the example of a lowering of interest rates it is possible to demonstrate that both a clear stimulation of investment activity and increased migration from farming may be expected. These, on the other hand, will lead to a sharpening of the trend towards the industrialisation of Austrian agriculture which will undoubtedly, under certain circumstances, provoke a conflict with the current "ecosocial" farm policy. However, the simulation results obtained make it clear that the importance of intersectoral influences at national economic level varies according to the content of the problems addressed. Although these influences have a negligible quantitative effect as far as the ability of interest rates to affect agricultural decision-making is concerned, analysis of the pattern of migration of the self-employed from the farming shows that in this case they are a dominating factor. If, moreover, the basic interrelationship between these effects can be easily established a priori theoretically, its effective quantiative significance can only be assessed using simulation experiments with an adequately specified total-analytical model. Even if it should emerge ex post for certain problems that intersectoral effects remain largely negligible, this is nevertheless in the end an empirical question which cannot be answered a priori. However, this does not mean that the second methodological hypothesis can now be dismissed out of hand, for the farm sector must be modelled as part of a national economic framework if the risk of distorted empirical results is to be avoided.