Using the Färe-Primont Index to Measure Changes in Total Factor Productivity of Dairy Farms

The aim of the research was to assess the changes (in dynamic terms between 2008 and 2017) in the productivity of farms specializing in milk production with the use of the Färe-Primont aggregated total factor productivity index. The total factor productivity index was divided into the efficiency change index and technological change index. The research was conducted with the use of a data panel consisting of 730 farms per annum. Data were acquired from the Polish FADN. The research adopted the dairy farm model consisting of 1 output (Y) and 9 (X) inputs. The model of dairy farm adopted for calculation purposes was a minimum input farm, assuming variable returns to scale (VRS). Between 2008 and 2017, the Färe-Primont total factor productivity index decreased by 28% (0.720). Changes in the total factor productivity index (dTFP) were affected by a 21.6% (1.216) increase in technological changes and a 40.8% (0.592) decrease in efficiency changes (dTFPE). The research results demonstrate that the key source of productivity in Poland is the technological progress, while the efficiency changes contributed to a decrease in the Färe-Primont total factor productivity index. The larger the economic size of the farm, cow herd size, agricultural area, total labor input (AWU), and cow milk yield, the greater the changes in the Färe-Primont total factor productivity index.