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Regional technical efficiency rankings and their determinants in the Irish dairy industry: A stochastic meta‐frontier analysis

Lungelo P. Cele, Thia Hennessy and Fiona Thorne

Agribusiness, 2023, vol. 39, issue 3, 727-743

Abstract: The paper aims to evaluate regional farm efficiency rankings for Ireland which seeks to be a leader in the global dairy industry. It conducts a within‐country analysis based on technical and scale efficiency of dairy farms to explore how regional constraints imposed by the milk quota may have affected Ireland's regional farm efficiency levels. The stochastic meta‐frontier approach is adopted because of its usefulness in comparing regional technical efficiencies. The findings suggest that policies aiming to promote labor and soil quality improvement in the East region, and that relate to discussion groups in the South region, in addition to management of herd size, would be useful for improving efficiency postquota. Moreover, some farms expanded beyond their optimal scale leading to a reduction in efficiency levels and this points to the need to tailor farm advice and promote caution and prudence in farm expansion decisions, especially in a region like South West. [EconLit Citations: D22, D24, L25, Q1, R1, R58].

Date: 2023
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