Productivity and Subsidies in European Union Countries: An Analysis for Dairy Farms Using Input Distance Frontiers

Laure Latruffe, Boris Bravo-Ureta, Victor H. Moreira, Yann Desjeux and Pierre Dupraz

No 114396, 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland from European Association of Agricultural Economists

Abstract: The major objective of this paper is to examine the association between agricultural subsidies and farm efficiency using data from the European Farm Accountancy Data Network (FADN) for operations specializing on dairy. The analysis covers the 18 year period going from 1990 to 2007 and includes the following seven countries: Denmark; France; Germany; Ireland; Spain; the Netherlands; and the United Kingdom. Separate translog stochastic input distance frontiers are estimated for each country. The key results show high average technical efficiency (TE) ranging from 91.8% to 94.9%, average rates of technological change going from -0.6% to 1.4%, and increasing returns to scale (1.24 to 1.44) across all seven countries. In addition, higher subsidy and hired labor dependence are found to be significantly associated with higher technical inefficiency across all seven countries. Moreover, the latest Common Agricultural Policy (CAP) regime introducing fully decoupled payments has reduced TE in all countries considered except Denmark.

Keywords: Livestock Production/Industries; Productivity Analysis (search for similar items in EconPapers)
Pages: 16
Date: 2011
New Economics Papers: this item is included in nep-agr, nep-eff and nep-eur
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Citations: View citations in EconPapers (25)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:eaae11:114396

DOI: 10.22004/ag.econ.114396

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