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Effects of scale, intensity and farm structure on the income efficiency of Irish beef farms

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  • Finneran, E.
  • Crosson, p.

Abstract

Data envelopment analysis (DEA) was employed to develop a model of income and scale efficiency for Irish beef farms. The objective was to identify and quantify management, farm structural and intensity indicators of efficiency for over 400 representative farms over two production systems and two years. Bootstrapping techniques were employed to measure and correct efficiency scores for sampling bias. Less than 10% of the sample exhibited constant or increasing returns to scale. The remaining farms exhibited decreasing returns to scale meaning that they were larger than optimal scale. Greater income efficiency was associated with lower levels of concentrate feeding and lower overhead costs per livestock unit (LU). Fragmentation, paid labour and capital investment were significantly negatively associated with income efficiency. There was a positive relationship between market gross output per LU and income efficiency. Negative market net margins tended to be subsidised by greater off-farm income on smaller (more scale efficient) farms and by greater direct payments on larger (more scale inefficient) farms. Consequently, prospects for increasing beef output via scale expansion are negative in an external environment of declining subsidies and reduced off-farm employment in rural areas. Increased output from Irish beef farms must therefore come primarily from farm system structural changes rather than scale changes, otherwise farm income efficiency will decline.

Suggested Citation

  • Finneran, E. & Crosson, p., 2013. "Effects of scale, intensity and farm structure on the income efficiency of Irish beef farms," International Journal of Agricultural Management, Institute of Agricultural Management, vol. 2(4), pages 1-12, July.
    • Handle: RePEc:ags:ijameu:175077
    DOI: 10.22004/ag.econ.175077
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    References listed on IDEAS

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    Cited by:

    1. Maria Martinez Cillero & Fiona Thorne & Michael Wallace & James Breen & Thia Hennessy, 2018. "The Effects of Direct Payments on Technical Efficiency of Irish Beef Farms: A Stochastic Frontier Analysis," Journal of Agricultural Economics, Wiley Blackwell, vol. 69(3), pages 669-687, September.
    2. Hooks Teresa & Macken-Walsh Áine & McCarthy Olive & Power Carol & Henchion Maeve, 2018. "Co-Operation among Irish Beef Farmers: Current Perspectives and Future Prospects in the Context of New Producer Organisation (PO) Legislation," Sustainability, MDPI, vol. 10(11), pages 1-19, November.
    3. Tsakiridis, Andreas & Breen, James & O'Donoghue, Cathal & Hanrahan, Kevin & Wallace, Michael & Crosson, Paul, 2016. "Flexibility of beef suckler cow systems under varying calf retention strategies," 90th Annual Conference, April 4-6, 2016, Warwick University, Coventry, UK 236289, Agricultural Economics Society.
    4. Andreas Tsakiridis & Michael Wallace & James Breen & Cathal O'Donoghue & Kevin Hanrahan, 2021. "Beef quality assurance schemes: Can they improve farm economic performance?," Agribusiness, John Wiley & Sons, Ltd., vol. 37(3), pages 451-471, July.

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