Pure and compensated efficiency of Swedish dairy farms

Authors

  • Gordana Manevska-Tasevska AgriFood Economics Centre, Department of Economics, Swedish University of Agricultural Sciences, Box 7013, 750 07 Uppsala; AgriFood Economics Centre, Department of Economics, Swedish University of Agricultural Sciences, Box 730, 220 07 Lund; Department of Economics, Swedish University of Agricultural Sciences,Box 7013, 750 07 Uppsala, Sweden
  • Ewa Rabinowicz AgriFood Economics Centre, Department of Economics, Swedish University of Agricultural Sciences, Box 730, 220 07 Lund, Sweden
  • Yves Surry Department of Economics, Swedish University of Agricultural Sciences,Box 7013, 750 07 Uppsala, Sweden

Keywords:

compensated technical efficiency, dairy farms, environmental support, pure technical efficiency, Sweden

Abstract

The compensatory effect of environmental subsidies for agri-environmental output constraints was evaluated through a comparative analysis observing the ‘pure’ efficiency, as a benchmark for prevailing production conditions, and the ‘compensated’ efficiency, as a proxy indicator of the compensation. An unbalanced data panel covering 3578 Swedish dairy farms in the period 2002-2012 was used. The analysis showed that in the study period, environmental farm support decreased the differences in farm revenue generated by agri-environmental output constraints in Sweden. However, the environmental support distribution did not succeed in meeting regional needs, so difficulties in farmers’ ability to generate output in southern and central forest and valley areas of Sweden were visible. Furthermore, the environmental agricultural support had only a partial subsidisation effect on ‘green’ farm management practices, with full compensation being achieved for organic and capital-extensive farming, whereas low livestock density farming was not sufficiently compensated. This analysis reveals incentives with policy implications for farm economic performance and provides direct input to future policy recommendations for environmental support allocation.

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Articles

Published

2016-08-25

How to Cite

Manevska-Tasevska, G., Rabinowicz, E., & Surry, Y. (2016). Pure and compensated efficiency of Swedish dairy farms. Agricultural and Food Science, 25(2), 111–123. https://doi.org/10.23986/afsci.53182
Received 2015-10-31
Accepted 2016-07-23
Published 2016-08-25