Agricultural prices in transition economies: The case of Bulgaria and Slovenia

The paper studies the extent to which the transition in agricultural prices has satisfactorily been implemented in Bulgaria and Slovenia and the degre e to which actual prices reflect the equilibrium conditions of the market. In Bulgaria, a model in which the new and old regime can co-exist, was esti mated using the Kalman filter while in Slovenia, a market clearing supply-d emand model for each agricultural product is estimated. The quantitative re sults show that the liberalisation process in agricultural prices is implem ented in Bulgaria in a satisfactory way. The way of price determination is shifting from a cost-based approach to a market clearing one. The conclusio ns for Slovenia suggest that, at least for the period studied, convergence to a market clearing economy, as measured by the state intervention, is not as rapid as desired.