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Effects of redistributing policy support on farmers’ technical efficiency

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  • Andrea Bonfiglio
  • Roberto Henke
  • Fabio Pierangeli
  • Maria Rosaria Pupo D'Andrea

Abstract

The objective of this article is twofold: first, investigating the relationship between technical efficiency and decoupled direct payments of a sample of Italian farms prior to the application of the 2014–2020 Common Agricultural Policy reform; second, evaluating possible implications of alternative scenarios about distribution of direct payments on technical efficiency. To these aims, a stochastic frontier analysis is adopted. Results indicate that direct payments produce significant effects on technical efficiency in specialized farms, which received higher levels of support. However, effects are contrasting. Moreover, results show that redistribution of policy subsidies may negatively impact on technical efficiency to an extent depending upon the criterion of redistribution applied. Finally, some policy suggestions are given.

Suggested Citation

  • Andrea Bonfiglio & Roberto Henke & Fabio Pierangeli & Maria Rosaria Pupo D'Andrea, 2020. "Effects of redistributing policy support on farmers’ technical efficiency," Agricultural Economics, International Association of Agricultural Economists, vol. 51(2), pages 305-320, March.
    • Handle: RePEc:bla:agecon:v:51:y:2020:i:2:p:305-320
    DOI: 10.1111/agec.12556
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    2. S. C. West & A. W. Mugera & R. S. Kingwell, 2022. "The choice of efficiency benchmarking metric in evaluating firm productivity and viability," Journal of Productivity Analysis, Springer, vol. 57(2), pages 193-211, April.
    3. Luca Romagnoli & Vincenzo Giaccio & Luigi Mastronardi & Maria Bonaventura Forleo, 2021. "Highlighting the Drivers of Italian Diversified Farms Efficiency: A Two-Stage DEA-Panel Tobit Analysis," Sustainability, MDPI, vol. 13(23), pages 1-16, November.
    4. Maria Martinez Cillero & Miguel Tovar Reaños, 2023. "Farm technical and environmental efficiency and subsidy redistribution in Ireland: A simulation approach of possible performance and equity effects," Journal of Agricultural Economics, Wiley Blackwell, vol. 74(2), pages 394-412, June.
    5. K Hervé Dakpo & Laure Latruffe & Yann Desjeux & Philippe Jeanneaux, 2022. "Modeling heterogeneous technologies in the presence of sample selection: The case of dairy farms and the adoption of agri‐environmental schemes in France," Agricultural Economics, International Association of Agricultural Economists, vol. 53(3), pages 422-438, May.
    6. Zheng, Hongyun & Ma, Wanglin & Wang, Fang & Li, Gucheng, 2021. "Does internet use improve technical efficiency of banana production in China? Evidence from a selectivity-corrected analysis," Food Policy, Elsevier, vol. 102(C).
    7. Kuhle Prudence Mnisi & Abdul Latif Alhassan, 2021. "Financial structure and cooperative efficiency: A pecking‐order evidence from sugarcane farmers in Eswatini," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 92(2), pages 261-281, June.
    8. Frýd, Lukáš & Sokol, Ondřej, 2021. "Relationships between technical efficiency and subsidies for Czech farms: A two-stage robust approach," Socio-Economic Planning Sciences, Elsevier, vol. 78(C).
    9. Yong Liu & Jorge Ruiz-Menjivar & Junbiao Zhang, 2023. "Do soil nutrient management practices improve climate resilience? Empirical evidence from rice farmers in central China," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(9), pages 10029-10054, September.
    10. Tovar Reanos, Miguel & Martinez-Cillero, Maria, 2021. "Technical efficiency and equity effects of environmental payments in Ireland," Papers WP711, Economic and Social Research Institute (ESRI).
    11. Zhu, Xiaoke & Hu, Ruifa & Zhang, Chao & Shi, Guanming, 2021. "Does Internet use improve technical efficiency? Evidence from apple production in China," Technological Forecasting and Social Change, Elsevier, vol. 166(C).
    12. Wang, Zihan & Huang, Fubin & Liu, Jing & Shuai, Jing & Shuai, Chuanmin, 2020. "Does solar PV bring a sustainable future to the poor? -- an empirical study of anti-poverty policy effects on environmental sustainability in rural China," Energy Policy, Elsevier, vol. 145(C).

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