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CAP Reforms and Total Factor Productivity Growth in Belgian Agriculture: A Malmquist Index Approach

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  • Coelli, Tim J.
  • Perelman, Sergio
  • Van Lierde, Dirk

Abstract

Have the 1992 and 2000 CAP reforms had any discernable effect upon agricultural productivity? In this study we derive detailed information on the total factor productivity (TFP) growth of arable farms in Belgium over a 16-year period from 1987 to 2002. Calculations are based on a carefully constructed high-quality detailed farm-level data set containing 1728 observations, involving over 100 farms in most years. Three output variables (cereals, other crops, other outputs) and four input variables (land, labour, capital and other inputs) are constructed, using multilateral Fisher index numbers where crop aggregation is required. The TFP measures are calculated using a Malmquist TFP index relative to a series of data envelopment analysis (DEA) frontiers. Annual average TFP change of 1.0% per year is estimated for this industry. This rate does not compare well with rates of over 2% that are commonly reported in studies involving other developed countries. The pattern of TFP growth over the period indicates that the two CAP reforms (in 1992 and 2000) have had no discernable effect upon TFP trends. An inspection of shadow shares (derived from the DEA frontiers) indicates that substantial distortions remain in this industry, especially with regards to the excess use of labour and constrained use of land, relative to other inputs. Finally, tabulation of results by region and farm size shows fairly uniform TFP change across regions, but poor performance in small farms, where TFP actually levels actually fell over this period.

Suggested Citation

  • Coelli, Tim J. & Perelman, Sergio & Van Lierde, Dirk, 2006. "CAP Reforms and Total Factor Productivity Growth in Belgian Agriculture: A Malmquist Index Approach," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25472, International Association of Agricultural Economists.
    • Handle: RePEc:ags:iaae06:25472
    DOI: 10.22004/ag.econ.25472
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    1. Jean‐Christophe Bureau & Rolf Färe & Shawna Grosskopf, 1995. "A Comparison Of Three Nonparametric Measures Of Productivity Growth In European And United States Agriculture," Journal of Agricultural Economics, Wiley Blackwell, vol. 46(3), pages 309-326, September.
    2. Tim J. Coelli & D. S. Prasada Rao, 2005. "Total factor productivity growth in agriculture: a Malmquist index analysis of 93 countries, 1980–2000," Agricultural Economics, International Association of Agricultural Economists, vol. 32(s1), pages 115-134, January.
    3. V. Ball & Jean-Christophe Bureau & Jean-Pierre Butault & Richard Nehring, 2001. "Levels of Farm Sector Productivity: An International Comparison," Journal of Productivity Analysis, Springer, vol. 15(1), pages 5-29, January.
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    2. Tamara Rudinskaya & Elena Kuzmenko, 2019. "Investments, Technical Change and Efficiency: Empirical Evidence from Czech Food Processing," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 11(4), December.
    3. Záhorský, T. & Pokrivčák, J., 2017. "Assessment of the Agricultural Performance in Central and Eastern European Countries," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 9(1), March.
    4. Laure Latruffe & Yann Desjeux, 2016. "Common Agricultural Policy support, technical efficiency and productivity change in French agriculture," Review of Agricultural, Food and Environmental Studies, Springer, vol. 97(1), pages 15-28, June.
    5. Sahrbacher, Christoph, 2011. "Regional structural change in European agriculture: Effects of decoupling and EU accession," Studies on the Agricultural and Food Sector in Transition Economies, Leibniz Institute of Agricultural Development in Transition Economies (IAMO), volume 60, number 60.
    6. Zoltan Bakucs & Imre Fertő & József Fogarasi & Laure Latruffe & Yann Desjeux & Eduard Matveev & Sonia Marongiu & Mark Dolman & Rafat Soboh, 2011. "EU farms’ technical efficiency and productivity change in 1990 – 2006 [Efficacité technique et changement de productivité des exploitations agricoles européennes 1990-2006]," Post-Print hal-02808334, HAL.
    7. Xueqin Zhu & Alfons Oude Lansink, 2010. "Impact of CAP Subsidies on Technical Efficiency of Crop Farms in Germany, the Netherlands and Sweden," Journal of Agricultural Economics, Wiley Blackwell, vol. 61(3), pages 545-564, September.
    8. Bakucs, Lajos Zoltan & Ferto, Imre & Latruffe, Laure & Desjeux, Yann & Soboh, Rafat & Dolman, Mark, 2011. "Comparative Analysis of Technical Efficiency in European Agriculture," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114235, European Association of Agricultural Economists.
    9. Merihun Fikru Meja & Bamlaku Alamirew Alemu & Maru Shete, 2021. "Total Factor Productivity of Major Crops in Southern Ethiopia: A Dis-Aggregated Analysis of the Growth Components," Sustainability, MDPI, vol. 13(6), pages 1-14, March.
    10. Yann, de Mey & Mark, Vancauteren & Frankwin, van Winsen & Erwin, Wauters & Ludwig, Lauwers & Steven, Van Passel, 2013. "Measuring productivity change using alternative input–output concepts: A farm level application using FADN data," 2013: Productivity and Its Impacts on Global Trade, June 2-4, 2013. Seville, Spain 152364, International Agricultural Trade Research Consortium.

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