Evaluating the Technical Efficiency of Dairy Farms Under Technological Heterogeneity: Evidence from Lithuania

Rūta Savickienė (), Virginia Namiotko and Aistė Galnaitytė
Additional contact information
Rūta Savickienė: Institute of Economics and Rural Development, Lithuanian Centre for Social Sciences, A. Vivulskio Str. 4A-13, LT 03220 Vilnius, Lithuania
Virginia Namiotko: Institute of Economics and Rural Development, Lithuanian Centre for Social Sciences, A. Vivulskio Str. 4A-13, LT 03220 Vilnius, Lithuania
Aistė Galnaitytė: Institute of Economics and Rural Development, Lithuanian Centre for Social Sciences, A. Vivulskio Str. 4A-13, LT 03220 Vilnius, Lithuania

Agriculture, 2025, vol. 15, issue 14, 1-20

Abstract: The European Union’s (EU) Common Agricultural Policy aims to promote sustainable farming practices that ensure the responsible use of natural resources, safeguard biodiversity, and uphold higher animal welfare standards. One pathway to achieving these objectives is through the encouragement of extensive farming. However, the dairy sector in EU countries as well as in Lithuania has shown a clear trend toward intensification. The aim of this study was to assess the technical efficiency (TE) of dairy farms employing extensive and intensive technologies. TE was evaluated using Data Envelopment Analysis (DEA) combined with meta-frontier analysis, which accounts for technological heterogeneity. Prior to the efficiency estimation, farms were grouped into two distinct categories—intensive and extensive—using the k-means clustering algorithm. The empirical results show that extensive dairy farms in Lithuania are smaller in land area and livestock units, rely more on internal resources, and exhibit lower productivity compared to intensive farms. Intensive farms achieved higher technical efficiency, narrower technological gaps, and more optimal scale efficiency, indicating superior resource management. The weaker performance of extensive farms is attributed to both less advanced technologies and production inefficiencies.

Keywords: dairy farms; technical efficiency; data envelopment analysis; heterogeneity (search for similar items in EconPapers)
JEL-codes: Q1 Q10 Q11 Q12 Q13 Q14 Q15 Q16 Q17 Q18 (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.mdpi.com/2077-0472/15/14/1469/pdf (application/pdf)
https://www.mdpi.com/2077-0472/15/14/1469/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jagris:v:15:y:2025:i:14:p:1469-:d:1697719

Access Statistics for this article

Agriculture is currently edited by Ms. Leda Xuan

More articles in Agriculture from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().