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A structural change analysis of the cost efficiency of farms in Scotland 1989-2008

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  • Revoredo-Giha, Cesar
  • Leat, Philip M.K.
  • Milne, Catherine E.

Abstract

One of the aims of the reform of the Common Agricultural Policy (CAP) is to increase the competitiveness of farmers through increasing their exposure to markets. An aspect of competitiveness is the gains in economic efficiency. Thus, the purpose of this paper is to estimate indicators of farm efficiency for the period 1989 to 2008 by farm type and to analyse what the effect on efficiency of changes in the CAP has been. In terms of the methodology, the information used comes from the Scottish Farm Account Scheme (FAS) survey, which allows us to assemble panel dataset and to construct cost efficiency indicators. The results indicate while mixed farms and lowland farms have maintain their levels of efficiency. LFA farms have seen their efficiency reduced since approximately 2004 or 2005 (especially LFA sheep farm specialists). Also, the analysis shows that there seems to be an increase in the dispersion of farmers in terms of efficiency for some farm types in periods of change in agricultural policy.

Suggested Citation

  • Revoredo-Giha, Cesar & Leat, Philip M.K. & Milne, Catherine E., 2010. "A structural change analysis of the cost efficiency of farms in Scotland 1989-2008," 114th Seminar, April 15-16, 2010, Berlin, Germany 61106, European Association of Agricultural Economists.
    • Handle: RePEc:ags:eaa114:61106
    DOI: 10.22004/ag.econ.61106
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    References listed on IDEAS

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    1. Berger, Allen N. & Mester, Loretta J., 1997. "Inside the black box: What explains differences in the efficiencies of financial institutions?," Journal of Banking & Finance, Elsevier, vol. 21(7), pages 895-947, July.
    2. Revoredo-Giha, Cesar & Milne, Catherine E. & Leat, Philip M.K. & Cho, Woong Je, 2009. "Efficiency of Scottish Farms: A Stochastic Cost Frontier Analysis," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 10(2), pages 1-19, July.
    3. Timothy J. Coelli & D.S. Prasada Rao & Christopher J. O’Donnell & George E. Battese, 2005. "An Introduction to Efficiency and Productivity Analysis," Springer Books, Springer, edition 0, number 978-0-387-25895-9, December.
    4. Antonio Alvarez & Carlos Arias, 2003. "Diseconomies of Size with Fixed Managerial Ability," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(1), pages 134-142.
    5. Chambers,Robert G., 1988. "Applied Production Analysis," Cambridge Books, Cambridge University Press, number 9780521314275, September.
    6. Caves, Douglas W & Christensen, Laurits R & Tretheway, Michael W, 1980. "Flexible Cost Functions for Multiproduct Firms," The Review of Economics and Statistics, MIT Press, vol. 62(3), pages 477-481, August.
    7. Kumbhakar,Subal C. & Lovell,C. A. Knox, 2003. "Stochastic Frontier Analysis," Cambridge Books, Cambridge University Press, number 9780521666633, September.
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    Keywords

    Agricultural and Food Policy; Farm Management; Land Economics/Use;
    All these keywords.

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