Factors Influencing Technical Efficiency in the EU Dairy Farms
This paper aims to analyse the technical efficiency (TE) of dairy farms and find its determinants. To accomplish this problem, the Stochastic Frontier Analysis was applied. The data were obtained from the Farm Accountancy Data Network database for dairy farms (TF15-45—Specialist dairying) for 2004–2...
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MDPI AG
2021-11-01
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| Series: | Agriculture |
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| Online Access: | https://www.mdpi.com/2077-0472/11/11/1114 |
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| author | Zdeňka Náglová Tamara Rudinskaya |
| author_facet | Zdeňka Náglová Tamara Rudinskaya |
| author_sort | Zdeňka Náglová |
| collection | DOAJ |
| description | This paper aims to analyse the technical efficiency (TE) of dairy farms and find its determinants. To accomplish this problem, the Stochastic Frontier Analysis was applied. The data were obtained from the Farm Accountancy Data Network database for dairy farms (TF15-45—Specialist dairying) for 2004–2019. Dairy farms were divided into four clusters according to their physical size (number of livestock units per farm) and economic size (standard output per farm). The largest farms by physical and economic size are located in Denmark and Cyprus. The smallest, in comparison, are in Bulgaria, Croatia, Latvia, Lithuania, Austria, Poland, Romania, and Slovenia. Farms in the EU are relatively technically efficient, i.e., they use their resources efficiently to produce maximum output (production). However, they have the potential to achieve better economic results and be more competitive, as the size of farms’ is not fully optimised. The abolition of the milk quota can be considered a factor in improving technical efficiency, as the indicator is higher after the abolition. New and old member states have almost comparable technical efficiency levels (the <i>p</i>-value of the <i>t</i>-test is 0.463), with old members having slightly higher level TE. Subsidies have contradictory effects on TE. Farm efficiency with higher subsidies per cow is higher for farms with €51–100/cow. However, as subsidies increase, TE decreases. Only the group of farms with the highest subsidies has a higher TE. More diversified farms are more technically efficient than specialised farms. Milk yield did not influence the analysed indicator. The analysis results can serve the stakeholders as a tool for modelling future agricultural policy, as the European farms are very heterogenous and show different conditions and economic outcomes. |
| first_indexed | 2024-03-10T05:48:28Z |
| format | Article |
| id | doaj.art-d500840c6fc841abab93add1b96918cb |
| institution | Directory Open Access Journal |
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| language | English |
| last_indexed | 2024-03-10T05:48:28Z |
| publishDate | 2021-11-01 |
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| record_format | Article |
| series | Agriculture |
| spelling | doaj.art-d500840c6fc841abab93add1b96918cb2023-11-22T21:59:26ZengMDPI AGAgriculture2077-04722021-11-011111111410.3390/agriculture11111114Factors Influencing Technical Efficiency in the EU Dairy FarmsZdeňka Náglová0Tamara Rudinskaya1Department of Economics of Food Industry and Agriculture, Institute of Agricultural Economics and Information, Mánesova 1453/75, 130 00 Prague, Czech RepublicDepartment of Agricultural Commodities, Institute of Agricultural Economics and Information, Mánesova 1453/75, 130 00 Prague, Czech RepublicThis paper aims to analyse the technical efficiency (TE) of dairy farms and find its determinants. To accomplish this problem, the Stochastic Frontier Analysis was applied. The data were obtained from the Farm Accountancy Data Network database for dairy farms (TF15-45—Specialist dairying) for 2004–2019. Dairy farms were divided into four clusters according to their physical size (number of livestock units per farm) and economic size (standard output per farm). The largest farms by physical and economic size are located in Denmark and Cyprus. The smallest, in comparison, are in Bulgaria, Croatia, Latvia, Lithuania, Austria, Poland, Romania, and Slovenia. Farms in the EU are relatively technically efficient, i.e., they use their resources efficiently to produce maximum output (production). However, they have the potential to achieve better economic results and be more competitive, as the size of farms’ is not fully optimised. The abolition of the milk quota can be considered a factor in improving technical efficiency, as the indicator is higher after the abolition. New and old member states have almost comparable technical efficiency levels (the <i>p</i>-value of the <i>t</i>-test is 0.463), with old members having slightly higher level TE. Subsidies have contradictory effects on TE. Farm efficiency with higher subsidies per cow is higher for farms with €51–100/cow. However, as subsidies increase, TE decreases. Only the group of farms with the highest subsidies has a higher TE. More diversified farms are more technically efficient than specialised farms. Milk yield did not influence the analysed indicator. The analysis results can serve the stakeholders as a tool for modelling future agricultural policy, as the European farms are very heterogenous and show different conditions and economic outcomes.https://www.mdpi.com/2077-0472/11/11/1114subsidiesfarm sizemilkcluster analysisstochastic frontier analysisEuropean Union |
| spellingShingle | Zdeňka Náglová Tamara Rudinskaya Factors Influencing Technical Efficiency in the EU Dairy Farms Agriculture subsidies farm size milk cluster analysis stochastic frontier analysis European Union |
| title | Factors Influencing Technical Efficiency in the EU Dairy Farms |
| title_full | Factors Influencing Technical Efficiency in the EU Dairy Farms |
| title_fullStr | Factors Influencing Technical Efficiency in the EU Dairy Farms |
| title_full_unstemmed | Factors Influencing Technical Efficiency in the EU Dairy Farms |
| title_short | Factors Influencing Technical Efficiency in the EU Dairy Farms |
| title_sort | factors influencing technical efficiency in the eu dairy farms |
| topic | subsidies farm size milk cluster analysis stochastic frontier analysis European Union |
| url | https://www.mdpi.com/2077-0472/11/11/1114 |
| work_keys_str_mv | AT zdenkanaglova factorsinfluencingtechnicalefficiencyintheeudairyfarms AT tamararudinskaya factorsinfluencingtechnicalefficiencyintheeudairyfarms |