Structural dynamics and sustainability in the agricultural sector: the case of the European Union

Abstract This paper seeks to draw a research agenda for unveiling the underlying bottlenecks and possibilities for improving the agricultural total factor productivity in the European Union (EU). To this aim, the paper first surveys the key challenges for the modern agricultural economy. Then, the case of the EU is discussed by looking at the convergence in the partial productivity indicators (including the GHG emission) and growth efficiency that relate to the gap in the total factor productivity growth. The results suggest that the EU member states exhibited growth inefficiency (i.e., a gap in the total factor productivity growth) of 5–9% on average during 2004–2021. The paper also discusses the possibilities to utilize the production theory for assessing the pathways towards improvements in the productivity and sustainability of the EU agriculture.