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Sustainable Upland Farm Businesses (1): Exploring determinants of efficiency among England’s upland farms

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  • Dwyer, Janet
  • Vigani, Mauro

Abstract

This paper represents the start of a research programme to investigate in detail the economics of English upland farming, in order to pursue greater economic, environmental and social sustainability in future. The Farm Business Survey sample of farms in the English LFA is analysed, examining economic performance over 4 years (2010 to 2013), looking for potential determinants of efficiency. The analysis examines technical efficiency as a first indicator, and analyses data for the 263 LFA grazing livestock farms in the dataset. A stochastic frontier approach is used to test hypotheses concerning whether farm scale, and/or various indicators of farming intensity, CAP subsidy and risk management, have significant influence upon performance. The results highlight some of the challenges in identifying and applying suitable indicators and suggest that the LFA may best be analysed by differentiating between higher-altitude and lower-lying farms, as the economic characteristics of these two groups are distinct. Within these groups we identify specific strategies as potentially significant, including early recruitment of ewe lambs into breeding and the sale of wool, as well as diversification off the holding, for lower lying farms; while agri-environment support and extensification appear influential among the higher-altitude group. Planned next steps include applying meta-frontier techniques; also analysing for determinants of profitability; and building a discussion and exchange forum with farmers and other stakeholders, through the Uplands Alliance, to maximise the value of these analyses via a wider community of learning.

Suggested Citation

  • Dwyer, Janet & Vigani, Mauro, 2016. "Sustainable Upland Farm Businesses (1): Exploring determinants of efficiency among England’s upland farms," 90th Annual Conference, April 4-6, 2016, Warwick University, Coventry, UK 236340, Agricultural Economics Society.
    • Handle: RePEc:ags:aesc16:236340
    DOI: 10.22004/ag.econ.236340
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    References listed on IDEAS

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    2. Kumbhakar, Subal C & Ghosh, Soumendra & McGuckin, J Thomas, 1991. "A Generalized Production Frontier Approach for Estimating Determinants of Inefficiency in U.S. Dairy Farms," Journal of Business & Economic Statistics, American Statistical Association, vol. 9(3), pages 279-286, July.
    3. Battese, G E & Coelli, T J, 1995. "A Model for Technical Inefficiency Effects in a Stochastic Frontier Production Function for Panel Data," Empirical Economics, Springer, vol. 20(2), pages 325-332.
    4. Christopher O’Donnell & D. Rao & George Battese, 2008. "Metafrontier frameworks for the study of firm-level efficiencies and technology ratios," Empirical Economics, Springer, vol. 34(2), pages 231-255, March.
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