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Evaluating the double effect of land fragmentation on technology choice and dairy farm productivity: A latent class model approach

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  • Orea, Luis
  • Pérez, Jose A.
  • Roibás, David

Abstract

Land fragmentation affects dairy farming through its influence on foodstuff production. As such, its impact is expected to be larger on extensive farms (which use a large land area per cow) than on intensive ones. Given this, land fragmentation could also constitute an obstacle to adopt extensive production technology. As direct payments of the Common Agricultural Policy to protect the environment and preserve rural heritage concern extensive farming, land fragmentation can reduce the effectiveness of this rural development aid. We propose using a stochastic frontier latent class model approach to evaluate this double effect of land fragmentation, namely its different impact on extensive and intensive farms’ productivity and its influence on the technology choice. The model is estimated using a sample of Spanish dairy farms located in a region where land is highly fragmented. Based on the results obtained, a simulation analysis is carried out to evaluate the impact of land consolidation processes on both the technology choice and farms’ productivity.

Suggested Citation

  • Orea, Luis & Pérez, Jose A. & Roibás, David, 2013. "Evaluating the double effect of land fragmentation on technology choice and dairy farm productivity: A latent class model approach," Efficiency Series Papers 2013/08, University of Oviedo, Department of Economics, Oviedo Efficiency Group (OEG).
  • Handle: RePEc:oeg:wpaper:2013/08
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    References listed on IDEAS

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    6. Tracy Bradfield & Robert Butler & Emma Dillon & Thia Hennessy & Paul Kilgarriff, 2021. "The Effect of Land Fragmentation on the Technical Inefficiency of Dairy Farms," Journal of Agricultural Economics, Wiley Blackwell, vol. 72(2), pages 486-499, June.

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