Technical Efficiency and Determinants of Mobility Patterns in European Agriculture

European agriculture has undergone considerable structural changes in the last two decades, with a decreasing number of farms and increasing farm size. One important question is whether these changes have been translated into improvements in technical efficiency. The paper provides a comparative analysis of farm technical efficiency in eight EU member states. More specifically, the authors focus on the relative performance fluctuation over time – namely, whether poorly performing farms always remain inefficient whilst some farms are always efficient. The most striking results are as follows. First, there is a remarkable robustness of farm efficiency stability across countries: on average, 60% of farms maintain their efficiency ranking in two consecutive years, while 20% improve and 20% worsen their positions. Second, there is a clear difference between the mobility indicators with respect to farm technical efficiency ranking between the EU15 and the new member states (NMS) included in the study. Due to unstable economic conditions, farms in NMS are more mobile than those in the EU15. Finally, using second-stage regression of mobility scores on a set of farm-specific explanatory variables, some explanations of the mobility patterns are offered.