The impact of agricultural productivity increases in the former Soviet Union and Eastern Europe on world agricultural markets

This paper studies the impact of productivity increases in the former Soviet Union and Eastern Europe on world agricultural markets and the regions' bilateral and sectoral agricultural trade flows. We use a six-region, 13-sector general equilibrium model. We find that productivity increases lead to a significant increase in the regions' agricultural output and exports and the former Soviet Union's agricultural imports. The former Soviet Union's net agricultural imports increase, whereas Eastern Europe's net agricultural trade balances improve. Overall, agricultural exporters will benefit, particularly, if productivity increases are not limited to or disproportionally high in agriculture.