Productivity change analysis in dairy farms following Polish accession to the EU

Abstract

The aim of this study was to assess changes in productivity of dairy farms after Poland’s accession to the European Union using a new decomposition of output growth within a stochastic frontier framework. We demonstrate how changes in economies of scale can be isolated, which leads to redefined components of output growth and a better measure of productivity growth. The productivity component is disaggregated to its three generic sources: total scale change, real technical change and efficiency change. An analysis of 1191 dairy farms based on data from 2004 to 2011 reveals that production growth (3.91%) is mostly due to input accumulation (3.4%) rather than productivity growth (0.51%.). Further decomposition indicates that the productivity component is driven by real technical growth (1%) and changes in scale elasticity, which had a negative effect on productivity (−0.81%). Conversely, technical efficiency growth (0.36%) played a minor role.

Keywords

Bayesian stochastic frontier analysis technical efficiency milk production components of output growth Farm Accountancy Data Network (FADN)

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Productivity change analysis in dairy farms following Polish accession to the EU – An output growth decomposition approach

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