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Technical Efficiency of Organic Farming in the Alpine Region – the Impact of Farm Structures and Policies

Author

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  • Lakner, Sebastian
  • Kirchweger, Stefan
  • Hoop, Daniel
  • Brümmer, Bernhard
  • Kantelhardt, Jochen

Abstract

The paper investigates the impact of subsidies and of para-agriculture on the technical efficiency of organic farms in Switzerland, Austria and Southern Germany. The data-set consists of bookkeeping data with 1,704 observations in the years 2003 to 2005. Technical efficiency is modelled using a stochastic distance-frontier model combined with a Metafrontier-model. The results show almost no efficiency differences among the farms in the three countries. Para-agriculture shows a strong impact on farm’s efficiency and output in Austria and Switzerland, whereas in Germany the effect is rather small. The study confirms that agricultural subsidies have a direct impact on farm’s efficiency.

Suggested Citation

  • Lakner, Sebastian & Kirchweger, Stefan & Hoop, Daniel & Brümmer, Bernhard & Kantelhardt, Jochen, 2014. "Technical Efficiency of Organic Farming in the Alpine Region – the Impact of Farm Structures and Policies," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 182763, European Association of Agricultural Economists.
    • Handle: RePEc:ags:eaae14:182763
    DOI: 10.22004/ag.econ.182763
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    References listed on IDEAS

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    1. Latruffe, Laure & Bravo-Ureta, Boris E. & Moreira, Victor H. & Desjeux, Yann & Dupraz, Pierre, 2011. "Productivity and Subsidies in European Union Countries: An Analysis for Dairy Farms Using Input Distance Frontiers," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114396, European Association of Agricultural Economists.
    2. George Battese & D. Rao & Christopher O'Donnell, 2004. "A Metafrontier Production Function for Estimation of Technical Efficiencies and Technology Gaps for Firms Operating Under Different Technologies," Journal of Productivity Analysis, Springer, vol. 21(1), pages 91-103, January.
    3. Lakner, Sebastian, 2009. "Technical efficiency of organic milk-farms in Germany - the role of subsidies and of regional factors," 2009 Conference, August 16-22, 2009, Beijing, China 51301, International Association of Agricultural Economists.
    4. Bernhard Brümmer & Thomas Glauben & Geert Thijssen, 2002. "Decomposition of Productivity Growth Using Distance Functions: The Case of Dairy Farms in Three European Countries," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(3), pages 628-644.
    5. Henningsen, Arne & Kumbhakar, Subal C. & Lien, Gudbrand D., 2009. "Econometric Analysis of the Effects of Subsidies on Farm Production in Case of Endogenous Input Quantities," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49728, Agricultural and Applied Economics Association.
    6. Mamardashvili, Phatima & Bokusheva, Raushan & Schmid, Dierk, 2014. "Heterogeneous Farm Output and Technical Efficiency Estimates," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 63(01), pages 1-15, March.
    7. Christopher O’Donnell & D. Rao & George Battese, 2008. "Metafrontier frameworks for the study of firm-level efficiencies and technology ratios," Empirical Economics, Springer, vol. 34(2), pages 231-255, March.
    8. 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.
    9. Mamardashvili, Phatima & Bokusheva, Raushan & Schmid, Dierk, 2014. "Heterogeneous Farm Output and Technical Efficiency Estimates," Journal of International Agricultural Trade and Development, Journal of International Agricultural Trade and Development, vol. 63(1).
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    Cited by:

    1. Maria Martinez Cillero & Fiona Thorne & Michael Wallace & James Breen & Thia Hennessy, 2018. "The Effects of Direct Payments on Technical Efficiency of Irish Beef Farms: A Stochastic Frontier Analysis," Journal of Agricultural Economics, Wiley Blackwell, vol. 69(3), pages 669-687, September.
    2. Djokoto, Justice G., 2015. "Technical efficiency of organic agriculture: a quantitative review," Studies in Agricultural Economics, Research Institute for Agricultural Economics, vol. 117(2), pages 1-11, August.
    3. Maria Martinez Cillero & Michael Wallace & Fiona Thorne & James Breen, 2021. "Analyzing the Impact of Subsidies on Beef Production Efficiency in Selected European Union Countries. A Stochastic Metafrontier Approach," American Journal of Agricultural Economics, John Wiley & Sons, vol. 103(5), pages 1903-1923, October.
    4. Manevska-Tasevska, Gordana & Hansson, Helena & Asmild, Mette & Surry, Yves, 2018. "Assessing the regional efficiency of Swedish agriculture under the CAP ‒ a multidirectional efficiency approach," 162nd Seminar, April 26-27, 2018, Budapest, Hungary 271971, European Association of Agricultural Economists.
    5. Lakner, Sebastian & Breustedt, Gunnar, 2015. "Efficiency analysis of organic farming systems- a review of methods, topics, results, and conclusions," 2015 Conference, August 9-14, 2015, Milan, Italy 212025, International Association of Agricultural Economists.
    6. Manevska-Tasevska, Gordana & Hansson, Helena & Asmild, Mette & Surry, Yves, 2021. "Exploring the regional efficiency of the Swedish agricultural sector during the CAP reforms ‒ multi-directional efficiency analysis approach," Land Use Policy, Elsevier, vol. 100(C).

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    Keywords

    Environmental Economics and Policy; Productivity Analysis;

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