BROADACRE FARM PRODUCTIVITY AND PROFITABILITY IN SOUTH WESTERN AUSTRALIA

Nazrul Islam, Vilaphonh Xayavong and Ross S. Kingwell

No 100565, 2011 Conference (55th), February 8-11, 2011, Melbourne, Australia from Australian Agricultural and Resource Economics Society

Abstract: This paper examines broadacre farm performance in south-western Australia. This region has experienced pronounced climate variability and volatile commodity prices over the last decade or so. Relationships between productivity and profitability are explored using panel data from 50 farms in the study region. The data are analysed using non-parametric methods. Components of farm productivity and profitability are measured over the period 1998 to 2008. Economies of scale and scope are shown often to be positive contributors to productivity and profitability. However, the main finding is that technical change, much more so than technical efficiency, has supplied over 68 percent of the improvement in total factor productivity for farms in the different climatic zones of the region from 1998 to 2008. In addition, growth in total factor productivity is the main contributor to farm profitability. By implication, technical change, often accompanied by scale and mix efficiencies, is the main driver of farm profitability. These findings indicate a vital role for innovation and R,D&E to deliver technologies and practices that bolster farm profitability, as well as a continuing role for scale and scope economies. The products and knowledge that come from innovation and R,D&E are the springboard for technical change. Through technical change and scale and scope efficiencies farmers in this study have achieved higher profits.

Keywords: Farm Management; Productivity Analysis; Research and Development/Tech Change/Emerging Technologies (search for similar items in EconPapers)
Pages: 16
Date: 2011
New Economics Papers: this item is included in nep-agr and nep-eff
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Related works:
Journal Article: Broadacre farm productivity and profitability in south-western Australia (2014)
Journal Article: Broadacre farm productivity and profitability in south-western Australia (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aare11:100565

DOI: 10.22004/ag.econ.100565

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