The Economics and Productivity of Organic versus Conventional U.S. Dairy Farms

United States certified organic and conventional dairy farms are compared on the basis of economic, financial, and technological measures using dairy data from the 2016 USDA Agricultural Resource Management Survey. A stochastic production frontier model using an input distance function framework is estimated for U.S. dairy farms to examine technical efficiency and returns to scale (RTS) of farms of both systems and by multiple size categories. Financial and economic measures such as net return on assets and input costs, as well as technological adoption measures are compared by system and size. For both systems, size is the major determinant of competitiveness based on selected measures of productivity and RTS.

Technical Efficiency in the European Dairy Industry: Can We Observe Systematic Failures in the Efficiency of Input Use?

The paper provides findings on the technical efficiency of the European dairy processing industry, which is one of the most important subsectors of the food processing industry in the European Union (EU). The ability to efficiently use inputs in the production of outputs is a prerequisite for the sustainability and competitiveness of the agri-food sector as well as for food security. Thus, the aim of this paper is to provide a robust estimate of technical efficiency by employing new advances in productivity and efficiency analysis, and to investigate the efficiency of input use in 10 selected European countries. The analysis is based on two-stage stochastic frontier modelling incorporating country-specific input distance function (IDF) estimates and a meta-frontier input distance function estimate, both in specification of the four-component model, which currently represents the most advanced approach to technical efficiency analysis. To provide a robust estimate of these models, the paper employs methods that control for the potential endogeneity of netputs in the multi-step estimation procedure. The results, based on the Amadeus dataset, reveal that companies manufacturing dairy products greatly exploited their production possibilities in 2006–2018. The dairy processing industry in the analysed countries cannot generally be characterized by a considerable waste of resources. The potential cost reduction is estimated at 4–8%, evaluated on the country samples mean. The overall technical inefficiency (OTE) is mainly a result of short-term shocks and unsystematic failures. However, the meta-frontier estimates also reveal a certain degree of systematic failure, e.g., permanent managerial failures and structural problems in European dairy processing industry.

Diversification economies in dairy farming – empirical evidence from Germany

This article explores how farm size is related to economic benefits from diversification. Using a data set pertaining to Bavarian dairy farms (2000–2014), we estimate an input distance function (IDF) to derive cost complementarities between distinct outputs. A Bayesian estimation technique is used to improve the theoretical consistency of the IDF. The results show that small dairy farms are more likely to benefit from diversification between milk and livestock production, while larger farms tend to benefit from diversification between milk and crop production. Both managerial and policy implications are discussed.

Total Factor Energy Productivity and Efficiency Changes of the Gher (Prawn-Carp-Rice) Farming System in Bangladesh: A Stochastic Input Distance Function Approach

This paper measures energy performance, Total Factor Energy Productivity (TFEP), technical change (TC) and energy efficiency change (EEC) of the gher (prawn-carp-rice) farming system using a unique panel data of 90 farmers covering a 14 year period (2002–2015) from southwest Bangladesh by employing a stochastic input distance function approach. Results reveal that all inputs contribute significantly to energy productivity of the gher farming system with male labor energy input being the major contributor followed by energy from machineries, seeds and chemicals. Energy performance of the High Yielding Variety (HYV) rice enterprise is highly efficient whereas the prawn enterprise is highly energy inefficient. Furthermore, energy performance of the HYV rice enterprise improved significantly over time. Significant competition exists between HYV rice and prawn enterprises as well as prawn and carp enterprises. Experience and education significantly improve energy efficiency whereas gher area and household size significantly reduces it. TFEP grew at the rate of 2.56% per annum (p.a.) solely powered by technical progress at the rate of 2.57% p.a. Gher system can be sustained in the long-run driven by technical progress and improvements in energy productivity of the HYV rice enterprise. Policy implications include investments in R&D and education targeted at the gher farmers.