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Effect Of Subsidies On Technical Efficiency Excluding Or Including Environmental Outputs: An Illustration With A Sample Of Farms In The European Union

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  • Latruffe, Laure
  • Dakpo, K.Hervé
  • Desjeux, Yann
  • Justinia Hanitravelo, Giffona

Abstract

With a sample of farms in the European Union (EU) and Farm Accountancy Data Network (FADN) data completed by additionally collected data, we illustrate how the effect of farm subsidies on technical efficiency changes when environmental outputs are incorporated in the calculation of technical efficiency. Results indicate that the effect of the Common Agricultural Policy (CAP) operational subsidies on farm technical efficiency changes when environmental outputs (namely greenhouse gas emissions, nitrogen balance and ecological focus areas) are taken into account in the efficiency calculation: some effects change significance, and more importantly, some effects change sign.

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  • Latruffe, Laure & Dakpo, K.Hervé & Desjeux, Yann & Justinia Hanitravelo, Giffona, 2017. "Effect Of Subsidies On Technical Efficiency Excluding Or Including Environmental Outputs: An Illustration With A Sample Of Farms In The European Union," 2017 International Congress, August 28-September 1, 2017, Parma, Italy 260902, European Association of Agricultural Economists.
  • Handle: RePEc:ags:eaae17:260902
    DOI: 10.22004/ag.econ.260902
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    References listed on IDEAS

    as
    1. Lansink, Alfons Oude & Reinhard, Stijn, 2004. "Investigating technical efficiency and potential technological change in Dutch pig farming," Agricultural Systems, Elsevier, vol. 79(3), pages 353-367, March.
    2. Laure Latruffe & Yann Desjeux & Zoltán Bakucs & Imre Fertő & József Fogarasi, 2013. "Environmental Pressures and Technical Efficiency of Pig Farms in Hungary," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 34(6), pages 409-416, September.
    3. Berre, David & Boussemart, Jean-Philippe & Leleu, Hervé & Tillard, Emmanuel, 2013. "Economic value of greenhouse gases and nitrogen surpluses: Society vs farmers’ valuation," European Journal of Operational Research, Elsevier, vol. 226(2), pages 325-331.
    4. Dakpo, K Hervé, 2016. "On modeling pollution-generating technologies: a new formulation of the by-production approach," Working Papers 245191, Institut National de la recherche Agronomique (INRA), Departement Sciences Sociales, Agriculture et Alimentation, Espace et Environnement (SAE2).
    5. repec:taf:applec:v:49:y:2017:i:2:p:213-226 is not listed on IDEAS
    6. Chih‐Ching Yang & Ching‐Kai Hsiao & Ming‐Miin Yu, 2008. "Technical efficiency and impact of environmental regulations in farrow‐to‐finish swine production in Taiwan," Agricultural Economics, International Association of Agricultural Economists, vol. 39(1), pages 51-61, July.
    7. Teresa Serra & David Zilberman & José M. Gil, 2008. "Farms' technical inefficiencies in the presence of government programs ," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 52(1), pages 57-76, March.
    8. Minviel, Jean Joseph & De Witte, Kristof, 2017. "The influence of public subsidies on farm technical efficiency: A robust conditional nonparametric approach," European Journal of Operational Research, Elsevier, vol. 259(3), pages 1112-1120.
    9. Mette Asmild & Jens Leth Hougaard, 2006. "Economic versus environmental improvement potentials of Danish pig farms," Agricultural Economics, International Association of Agricultural Economists, vol. 35(2), pages 171-181, September.
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    Keywords

    Production Economics;

    JEL classification:

    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy
    • C6 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling

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