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The Effect of CAP Subsidies on the Technical Efficiency of Polish Dairy Farms

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  • Jerzy Marzec

    (Cracow University of Economics)

  • Andrzej Pisulewski

    (University of Agriculture in Kraków)

Abstract

The main aim of this paper is to analyse the effect of Common Agricultural Policy (CAP) subsidies on technical efficiency of Polish dairy farms. We have distinguished several types of subsidies and provided an analysis to find out which types are most likely to engender systematic differences in technical efficiency. A balanced panel of microeconomic data on Polish dairy farms over an eight-year period (between 2004 and 2011), taken from the Farm Accountancy Data Network (FADN), is used. The translog production function is estimated by employing the Bayesian approach. The empirical results show that the elasticity of production with respect to livestock is the highest, whereas with respect to feed is the lowest. The mean technical efficiency in the covered period is 83%. The research reveals the negative effect of subsidies on technical efficiency.

Suggested Citation

  • Jerzy Marzec & Andrzej Pisulewski, 2017. "The Effect of CAP Subsidies on the Technical Efficiency of Polish Dairy Farms," Central European Journal of Economic Modelling and Econometrics, Central European Journal of Economic Modelling and Econometrics, vol. 9(3), pages 243-273, September.
  • Handle: RePEc:psc:journl:v:9:y:2017:i:3:p:243-273
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    3. Jerzy Marzec & Andrzej Pisulewski, 2021. "Measurement of technical efficiency in the case of heterogeneity of technologies used between firms - Based on evidence from Polish crop farms," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 67(4), pages 152-161.
    4. Marzec, Jerzy & Pisulewski, Andrzej, 2019. "The Measurement of Time Varying Technical Efficiency and Productivity Change in Polish Crop Farms," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 68(1), March.
    5. Jakub Staniszewski & Michał Borychowski, 2020. "The impact of the subsidies on efficiency of different sized farms. Case study of the Common Agricultural Policy of the European Union," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 66(8), pages 373-380.
    6. Agnė Žičkienė & Rasa Melnikienė & Mangirdas Morkūnas & Artiom Volkov, 2022. "CAP Direct Payments and Economic Resilience of Agriculture: Impact Assessment," Sustainability, MDPI, vol. 14(17), pages 1-24, August.

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    More about this item

    Keywords

    stochastic frontier analysis; dairy farms; Bayesian approach; panel data;
    All these keywords.

    JEL classification:

    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • C11 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Bayesian Analysis: General
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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