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The Impact of Parcel Structure on the Efficiency of Finnish Dairy Farms

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  • Niskanen, Olli
  • Heikkilä, Anna-Maija

Abstract

In Finland, expanding dairy farms often face the problem of additional fields being geographically distant and only available as small parcels. We develop a stochastic production frontier model to estimate the technical efficiency of Finnish dairy farms and simulate the effect of parcel distance and parcel size on the efficiency of an average farm for 2000 through 2009. The overall development of technical efficiency is positive during the study period but increases in distance and decreases in parcel size both significantly reduce farm efficiency. Therefore, efforts to improve the parcel structure are justified.

Suggested Citation

  • Niskanen, Olli & Heikkilä, Anna-Maija, 2015. "The Impact of Parcel Structure on the Efficiency of Finnish Dairy Farms," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 44(1), pages 1-13, April.
    • Handle: RePEc:ags:arerjl:200996
    DOI: 10.22004/ag.econ.200996
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    1. Heikki Lehtonen & Taru Palosuo & Panu Korhonen & Xing Liu, 2018. "Higher Crop Yield Levels in the North Savo Region—Means and Challenges Indicated by Farmers and Their Close Stakeholders," Agriculture, MDPI, vol. 8(7), pages 1-14, June.
    2. Dragan Milić & Tihomir Novaković & Dragana Tekić & Bojan Matkovski & Danilo Đokić & Stanislav Zekić, 2023. "Economic Sustainability of the Milk and Dairy Supply Chain: Evidence from Serbia," Sustainability, MDPI, vol. 15(21), pages 1-21, October.
    3. Tracy Bradfield & Robert Butler & Emma Dillon & Thia Hennessy & Paul Kilgarriff, 2021. "The Effect of Land Fragmentation on the Technical Inefficiency of Dairy Farms," Journal of Agricultural Economics, Wiley Blackwell, vol. 72(2), pages 486-499, June.
    4. Valtiala, Juho & Niskanen, Olli & Torvinen, Mikael & Riekkinen, Kirsikka & Suokannas, Antti, 2023. "The relationship between agricultural land parcel size and cultivation costs," Land Use Policy, Elsevier, vol. 131(C).

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