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EU farms’ technical efficiency and productivity change in 1990 – 2006

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  • Bakucs, Lajos Zoltan
  • Ferto, Imre
  • Fogarasi, Jozsef
  • Latruffe, Laure
  • Desjeux, Yann
  • Matveev, Eduard
  • Marongiu, Sonia
  • Dolman, Mark
  • Soboh, Rafat

Abstract

In this paper we analyse and compare various efficiency indicators for a number of European Union (EU) countries: Belgium, Estonia, France, Germany, Hungary, Italy, The Netherlands and Sweden. The availability of long period datasets between 1990 and 2006, allow us to concentrate on the long time trends in technical efficiency especially in Old Member States. This study is the first which may provide a comprehensive overview on the development in farm level efficiency across eight European countries. Our main results are the following. Generally, all countries have relatively high levels of mean technical efficiency ranging from 0.72 to 0.92 for both field crops and dairy farms. Interestingly the majority of countries have better performance in dairy sectors in terms of higher levels of mean efficiency than in field crop production. A slightly decreasing trend however may be observed for all countries. Technical Efficiency estimates are largely in line with those obtained by previous studies. Stability analysis revealed that in average 60% of farms maintain their efficiency ranking in two consecutive years, whilst 20% improve and 20% worsen their positions for all countries. However, these ratios slightly fluctuate around these values for one year to next year. Mobility analysis ranks countries according to the mobility of SFA scores within the distribution. Farms in New Member States are more mobile than those in EU15. Total productivity changes are analysed in two steps. First, we do not find a definite trend in total factor productivity changes. Second, we address the question whether total factor productivity changes converge or diverge over time. Using panel unit root tests our estimations reveal a convergence of productivity across old EU member countries during analysed period. Finally, we decompose the total factor productivity changes into its main elements. Field crop farm indicators generally present significantly higher volatility than dairy farms. Random effect panel regression of Total Factor Productivity Change on its components shows Technological Change as being the significant positive driver for crop farms, whilst Technical Efficiency Change followed by Technological Change are the most important for dairy farms. In addition we do not find significant impacts of CAP reforms in 1992 and 2000 on total productivity changes.

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Bibliographic Info

Paper provided by Agricultural Economics Society in its series 85th Annual Conference, April 18-20, 2011, Warwick University, Coventry, UK with number 108773.

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Date of creation: Apr 2011
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Handle: RePEc:ags:aesc11:108773

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Keywords: Production Economics;

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  1. Fogarasi, Jozsef & Latruffe, Laure, 2009. "Farm performance and support in Central and Western Europe: A comparison of Hungary and France," 2009 Conference, August 16-22, 2009, Beijing, China 51431, International Association of Agricultural Economists.
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  4. Lajos Zoltan Bakucs & Laure Latruffe & Imre Fertő & Jozsef Fogarasi, 2010. "The impact of EU accession on farms' technical efficiency in Hungary," Post-Communist Economies, Taylor & Francis Journals, vol. 22(2), pages 165-175.
  5. Xueqin Zhu & Alfons Oude Lansink, 2010. "Impact of CAP Subsidies on Technical Efficiency of Crop Farms in Germany, the Netherlands and Sweden," Journal of Agricultural Economics, Wiley Blackwell, vol. 61(3), pages 545-564.
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  14. Werner Kleinhan� & Carmen Murillo & Carlos San Juan & Stefan Sperlich, 2007. "Efficiency, subsidies, and environmental adaptation of animal farming under CAP," Agricultural Economics, International Association of Agricultural Economists, vol. 36(1), pages 49-65, 01.
  15. Bernhard Br�mmer & Thomas Glauben & Geert Thijssen, 2002. "Decomposition of Productivity Growth Using Distance Functions: The Case of Dairy Farms in Three European Countries," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(3), pages 628-644.
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