Structural Changes and Supply Elasticity of Potato Production: The Case of Slovenia

Abstract This study investigates the long-term structural transformation and supply responsiveness of potato production in Slovenia, a sector that has experienced a substantial and sustained contraction (more than 90% of total potato area in comparison to 1961) over the past several decades. Drawing on official statistical datasets covering the period from 1961 to 2024, we analyze trends in cultivated area, yields, price dynamics, and regional production patterns. Descriptive statistics, ANOVA, and spatial analyses reveal a marked decline of more than 90% in potato-growing area, contrasted by significant yield improvements attributable to technological progress and farm consolidation. Kernel density analysis of GERK parcel data confirms a highly fragmented production structure, with the vast majority of holdings cultivating less than one hectare and only a small proportion engaging in commercially meaningful production. To evaluate supply elasticity, we estimate a log–log regression model and a Nerlovian partial-adjustment model. The empirical results indicate negligible short-run price elasticity and strong path dependence, with lagged area emerging as the dominant predictor of current production. Long-run elasticity estimates remain weak, underscoring the limited capacity of Slovenian potato producers to adjust to market signals due to structural constraints, including small farm size, perishability of the product, and limited integration into commercial supply chains. The findings highlight a sector characterized by persistent contraction and low supply responsiveness. This evidence contributes to the understanding of supply behavior in structurally constrained agricultural systems and provides an analytical basis for future research and policy interventions targeting farm structure, market development, and regional production potential.