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Efficiency analysis of commercial grape-producing family farms in the Republic of Macedonia

  • Manevska-Tasevska, Gordana
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    An empirical analysis was conducted on the efficiency of commercial grape-producing family farms in the Republic of Macedonia in order to examine how farm performance is influenced by selected aspects of the current Rural Development Programme (RDP) (2007-2013). The emphasis was on Macedonian grape production on family farms and on instruments for more efficient use of resources, production modernisation, vine revitalisation, and the knowledge and managerial capacity of Macedonian grape growers. A two-stage analysis was carried out on farm-level data for the period 2006-2008. The estimated efficiency scores indicated that substantial efficiency improvements are possible on Macedonian grape-producing farms, with potential for a cost decrease of 29% (20% and 36% with parametric and bootstrapping applied) if farmers manage inputs more efficiently. Farm revenue can be improved by 47% (61% when bootstrapping applied) if farmers manage to increase the value of outputs. More efficient farms used a smaller area, irrigated a smaller proportion of total area, used less hired labour, used and paid less for inputs, but produced a larger quantity, with higher value per hectare. The technically more efficient farmers were: younger farmers, farmers with profit maximisation objectives; farmers with lower expectations of a better future for farming; farmers making choices with other family members; farmers monitoring production on the farm and maintaining bookkeeping records; those attending seminars, and those interested in competence-based knowledge such as plant protection, credit/investments. Interventions in production assortment and quality have potential to influence farm performance. Rural development policies can help improve farm efficiency. RDP measures targeted at achieving stable yield, yield improvement and modernisation of equipment, improving farmers' managerial performance and strengthening the capacity of sources providing non-formal education should be a high priority.

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    Paper provided by Swedish University of Agricultural Sciences, Department of Economics in its series Department of Economics publications with number 8496.

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    Date of creation: Dec 2011
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    Handle: RePEc:sua:ekonwp:8496
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