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Determinants of technical efficiency of crop and livestock farms in Poland

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  • Laure Latruffe
  • Kelvin Balcombe
  • Sophia Davidova
  • Katarzyna Zawalinska

Abstract

Poland, one of the candidate countries for European Union membership, is currently experiencing acute structural problems within its agriculture sector. This article analyses technical efficiency and its determinants for a panel of individual farms in Poland specialized in crop and livestock production in 2000. Technical efficiency is estimated with stochastic frontier analysis (SFA) and confidence intervals are constructed. Determinants of inefficiency are also evaluated. The SFA results are compared with results using Data Envelopment Analysis (DEA). On average, livestock farms are more technically efficient than crop farms. For both specializations, the size-efficiency relationship is positive, that is large farms are more efficient. The SFA findings are generally supported by the DEA results. Soil quality and the degree of integration with downstream markets are highly important determinants of efficiency. The use of factor markets (land and labour) is important for crop farms, while livestock farms can rely on family labour and own land. Also, education is a constraint to efficiency particularly for crop farms.

Suggested Citation

  • Laure Latruffe & Kelvin Balcombe & Sophia Davidova & Katarzyna Zawalinska, 2004. "Determinants of technical efficiency of crop and livestock farms in Poland," Applied Economics, Taylor & Francis Journals, vol. 36(12), pages 1255-1263.
  • Handle: RePEc:taf:applec:v:36:y:2004:i:12:p:1255-1263 DOI: 10.1080/0003684042000176793
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    References listed on IDEAS

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    1. LĂ©opold Simar & Paul Wilson, 2000. "Statistical Inference in Nonparametric Frontier Models: The State of the Art," Journal of Productivity Analysis, Springer, vol. 13(1), pages 49-78, January.
    2. Jondrow, James & Knox Lovell, C. A. & Materov, Ivan S. & Schmidt, Peter, 1982. "On the estimation of technical inefficiency in the stochastic frontier production function model," Journal of Econometrics, Elsevier, vol. 19(2-3), pages 233-238, August.
    3. Philip Lund & Roger Price, 1998. "The Measurement of Average Farm Size," Journal of Agricultural Economics, Wiley Blackwell, vol. 49(1), pages 100-110.
    4. Bruce F. Hall & E. Phillip LeVeen, 1978. "Farm Size and Economic Efficiency: The Case of California," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 60(4), pages 589-600.
    5. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
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