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Efficiency and Sustainability in Farm Diversification Initiatives in Northern Spain

Author

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  • Beatriz García-Cornejo

    (Department of Accounting, Faculty of Economics and Business Administration, University of Oviedo, 33006 Oviedo, Spain)

  • José A. Pérez-Méndez

    (Department of Accounting, Faculty of Economics and Business Administration, University of Oviedo, 33006 Oviedo, Spain)

  • David Roibás

    (Department of Economics, Faculty of Economics and Business Administration, University of Oviedo, 33006 Oviedo, Spain)

  • Alan Wall

    (Department of Economics, Faculty of Economics and Business Administration, University of Oviedo, 33006 Oviedo, Spain)

Abstract

The value-added diversification strategy provides an option for guaranteeing the sustainability of small farms. This study examines how factors related to managerial strategy and socio-environmental sustainability influence the efficiency of diversification initiatives. For this purpose, we use a novel and unique database of value-added ventures implemented by 49 dairy farms located in northern Spain. We construct a production frontier using a Data Envelopment Analysis (DEA) model to estimate technical efficiency. The mean technical efficiency of the initiatives was 0.56 and 0.59 for the constant and variable returns specifications, respectively. Determinants of efficiency are analyzed with a two-step procedure with a double bootstrap. We find that the elaborations of more complex products other than fresh milk are negatively associated with efficiency. However, specialization in one product with different variants and direct sales both have a positive association with efficiency. In terms of socio-environmental variables, there is a positive association between efficiency and the use of quality schemes such as ‘protected designation of origin’ (PDO), the use of organic labelling and the farmer having university education, and a negative association with the percentage of family labor. Our findings support the idea that value-added diversification contributes to more resilient pathways of development and underlines the importance of good quality management of marketing and operational factors.

Suggested Citation

  • Beatriz García-Cornejo & José A. Pérez-Méndez & David Roibás & Alan Wall, 2020. "Efficiency and Sustainability in Farm Diversification Initiatives in Northern Spain," Sustainability, MDPI, vol. 12(10), pages 1-18, May.
    • Handle: RePEc:gam:jsusta:v:12:y:2020:i:10:p:3983-:d:357463
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    1. 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.
    2. Štefan Bojnec & Kristina Knific, 2021. "Farm Household Income Diversification as a Survival Strategy," Sustainability, MDPI, vol. 13(11), pages 1-16, June.
    3. Abele Kuipers & Agata Malak-Rawlikowska & Aldona Stalgienė & Anita Ule & Marija Klopčič, 2021. "European Dairy Farmers’ Perceptions and Responses towards Development Strategies in Years of Turbulent Market and Policy Changes," Agriculture, MDPI, vol. 11(4), pages 1-24, March.
    4. Javier García-Gudiño & Elena Angón & Isabel Blanco-Penedo & Florence Garcia-Launay & José Perea, 2022. "Targeting Environmental and Technical Parameters through Eco-Efficiency Criteria for Iberian Pig Farms in the dehesa Ecosystem," Agriculture, MDPI, vol. 13(1), pages 1-15, December.
    5. Cristian Adasme-Berríos & Rodrigo Valdes & Lisandro Roco & David Gómez & Emilia Carvajal & Camila Herrera & Joaquín Espinoza & Karla Rivera, 2022. "Segmentation of Consumer Preferences for Vegetables Produced in Areas Depressed by Drought," Sustainability, MDPI, vol. 14(10), pages 1-13, May.
    6. Amer Ait Sidhoum, 2023. "Assessing the contribution of farmers’ working conditions to productive efficiency in the presence of uncertainty, a nonparametric approach," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(8), pages 8601-8622, August.
    7. Leonidas Sotirios Kyrgiakos & Georgios Kleftodimos & George Vlontzos & Panos M. Pardalos, 2023. "A systematic literature review of data envelopment analysis implementation in agriculture under the prism of sustainability," Operational Research, Springer, vol. 23(1), pages 1-38, March.

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