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Driving and restraining forces for economic and technical efficiency in dairy farms

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  • Hansson, Helena
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    Abstract

    The overall aim of this study was to analyze what drives and restrains efficient dairy production, based on data from dairy farms in Sweden. Key back ground factors of the study was that Swedish farms are getting larger and fewer, the Mid Term Review which changes the market situation and the evidence from several international studies that dairy farms can become more efficient than they are. The literature revealed three themes which were considered as fruitful conceptual frameworks for the analysis: the overall structure of inefficiency, the farm itself and the farmer managerial capacity. The first theme was analyzed in Paper I and II, the second theme in Paper III and the third in Paper IV. The study was based on farm accounting data from Statistics Sweden, a database of gross margin budgets for different agricultural production lines and regions in Sweden (Agriwise), a dairy cow recording scheme and a mail-questionnaire. All papers were based on data envelopment efficiency scores and regression analyzes. Paper I analyzed the structure of inefficiency by considering which efficiency perspective (input or output) offers the more opportunities for improvements. Further, the links between management's critical success factors (MCSFs) and efficiency were analyzed. It was concluded that especially the allocative input efficiency could be improved. Moreover, the links between MCSFs and efficiency were typically weak. Paper II continued to analyze the overall structure of inefficiency by analyzing how farm size affected farm level efficiency. It was concluded that technical and allocative efficiency scores are typically affected by farm size in opposite ways. Paper III analyzed how aspects of the farm itself, typically determined in the long-run strategic management, affected farm efficiency. It was e.g. concluded that high focus on dairy production restrains efficiency, while a discussion partner drives efficiency. Paper IV analyzed how differences in farmer managerial capacity, i.e. differences in personal aspects and decision making characteristics influenced farm efficiency. It was e.g. concluded that education in agriculture and participation in study circles drive efficiency whereas a positive profitability perception restrains efficiency.

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    Bibliographic Info

    Paper provided by Swedish University of Agricultural Sciences, Department of Economics in its series Department of Economics publications with number 1614.

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    Date of creation: 2007
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    Handle: RePEc:sua:ekonwp:1614

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