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Estimating the Technical Optimal Scale of Production in Danish Agriculture

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  • Rasmussen, Svend

Abstract

This paper uses representative farm account data for 1985-2007 to estimate stochastic production frontiers in the form of input distance functions for Danish crop, dairy and pig farms. The objective is to study and compare scale economies for the three farm types. The estimated technical efficiency is relatively constant over time for all three farm types, but the elasticity of scale differs. Although the size of all farm types has increased considerably during the last 20 years, more than 95 % of the crop farms and 85 % of the dairy and pig farms are still below the estimated technical optimal scale of production. The results support the hypothesis that the restrictions concerning the amalgamation of farms and the purchase of farm land have seriously prevented Danish farmers, and especially cash crop farmers, from taking full advantage of scale economies.

Suggested Citation

  • Rasmussen, Svend, 2011. "Estimating the Technical Optimal Scale of Production in Danish Agriculture," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114790, European Association of Agricultural Economists.
    • Handle: RePEc:ags:eaae11:114790
    DOI: 10.22004/ag.econ.114790
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    References listed on IDEAS

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    1. Chambers,Robert G., 1988. "Applied Production Analysis," Cambridge Books, Cambridge University Press, number 9780521314275, January.
    2. Bert Balk, 2001. "Scale Efficiency and Productivity Change," Journal of Productivity Analysis, Springer, vol. 15(3), pages 159-183, May.
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    5. Chavas, Jean-Paul, 2001. "Structural change in agricultural production: Economics, technology and policy," Handbook of Agricultural Economics, in: B. L. Gardner & G. C. Rausser (ed.), Handbook of Agricultural Economics, edition 1, volume 1, chapter 5, pages 263-285, Elsevier.
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    Cited by:

    1. Mikkel Bojesen & Hans Skov-Petersen & Morten Gylling, 2013. "Forecasting the potential of Danish biogas production: spatial representation of Markov chains," IFRO Working Paper 2013/16, University of Copenhagen, Department of Food and Resource Economics.
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    5. Cai, Rong & Ma, Jie & Wang, Shujuan & Cai, Shukai, 2024. "Access to credit and scale efficiency: Evidence from family farms in East China," Economic Analysis and Policy, Elsevier, vol. 84(C), pages 1538-1551.
    6. Plogmann, Jana & Mußhoff, Oliver & Odening, Martin & Ritter, Matthias, 2022. "Farm growth and land concentration," Land Use Policy, Elsevier, vol. 115(C).
    7. Martini, Bruno Guilherme & Helfer, Gilson Augusto & Barbosa, Jorge Luis Victória & Modolo, Regina Célia Espinosa & da Silva, Marcio Rosa & de Figueiredo, Rodrigo Marques, . "Prediction and Context Awareness in Agriculture: A Systematic Mapping," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 12(3).
    8. Tohidi, Amirhossein & Ghorbani, Mohammad & Karbasi, Ali-Reza & Asgharpourmasouleh, Ahmadreza & Hassani-Mahmooei, Behrooz, . "Comparison of Fuzzy Multi-Criteria Decision-Making Methods to Rank Business Strategies and Marketing Resources," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 12(3).
    9. Adamides, George, . "Heuristic Evaluation of the User Interface for a Semi-Autonomous Agricultural Robot Sprayer," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 12(3).
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    12. Thuy, Phan Thi & Niem, Le Duc & Lebailly, Philippe, . "Recent Evolution of Perennial Crop Farms: Evidence from Dak Lak Province, Vietnam," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 12(3).
    13. Prokopchuk, Olena & Prokopchuk, Ihor & Mentel, Grzegorz & Bilan, Yuriy, . "Parametric Insurance as Innovative Development Factor of the Agricultural Sector of Economy," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 12(3).
    14. Tomas Baležentis, 2016. "Stochastic production frontier for the Lithuanian family farms," Journal of Business Economics and Management, Taylor & Francis Journals, vol. 17(2), pages 283-298, April.
    15. repec:ags:aolpei:320070 is not listed on IDEAS
    16. Pánková, Ludmila & Aulová, Renata & Jarolímek, Jan, . "Economic Aspects of Precision Agriculture Systems," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 12(3).

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