Productivity of Czech Milk Production in European Comparison
No 3/2020, September
Žáková Kroupová, Z., Hálová, P. and Rumánková, L. (2020) “Productivity of Czech Milk Production in European Comparison", AGRIS on-line Papers in Economics and Informatics, Vol. 12, No. 3, pp. 115-127. ISSN 1804-1930. DOI 10.7160/aol.2020.120310.
The aim of the paper is to evaluate the development and main characteristics of Czech milk production productivity and to compare Czech development with the situation in the European Union. From a methodological point of view, a parametric approach in the form of stochastic frontier analysis was applied, the input distance function was estimated, and total factor productivity was examined. The analysis used an unbalanced panel data set, which describes TF14-45 specialist milk production from 27 member states of the European Union in the period 2004–2016 collected in the FADN database. The results showed that in the Czech Republic, the average value of technical efficiency was 94.01% during the analysed time period. Compared to EU member states, this figure was above the EU-13 average (93.71%). Czech milk production in the analysed period and the milk production of almost all other EU countries was characterized by increasing returns to scale. Examination of total factor productivity (TFP) showed that the scale effect and technical efficiency change effect can be considered the main components of TFP changes in Czech milk production. However, the scale effect was more significant in EU-15 countries than the Czech milk sector.
Milk, Czech Republic, European Union, technical efficiency, random parameter model, total factor productivity.
- Alvarez, A., del Corral, J. (2010) "Identifying different technologies using a latent class model: extensive versus intensive dairy farms", European Review of Agricultural Economics, Vol. 37, No. 2, pp. 231-250. ISSN 0165-1587. DOI 10.1093/erae/jbq015.
- Bakucs, L. Z., Fertö, I., Fagarasi, J. and Tóth, J. (2012) “Farm organisation and efficiency in Hungarian dairy farms”, Milchwissenschaft, Vol. 67, No. 2, pp. 147-150. ISSN 0026-3788.
- Barnes, A. (2008) "Technical Efficiency Estimates of Scottish Agriculture: A Note", Journal of Agricultural Economics, Vol. 59, No. 2, pp. 370-376. ISSN 1477-9552. DOI 10.1111/j.1477-9552.2008.00156.x.
- Bauer, P. W. (1990) “Decomposing TFP growth in the presence of cost inefficiency, nonconstant returns to scale, and technological progress”, Journal of Productivity Analysis, Vol. 1, No. 4, pp. 287-299. ISSN 1573-0441. DOI 10.1007/BF00160047.
- Bokusheva, B., Čechura, L. (2017) "Evaluating dynamics, sources and drivers of productivity growth at the farm level", OECD Food, Agriculture and Fisheries Papers, No. 106, OECD Publishing, Paris.
- Coelli, T., Singh, S. and Fleming, E. (2003) “An input distance function approach to the measurement of technical and allocative efficiency: with application to Indian dairy processing plants”. [Online]. Available: https://editorialexpress.com/cgibin/conference/download.cgi?db_name=esam2003&paper_id=105 [Accessed: 15 March 2015].
- Čechura, L., Grau, A., Hockmann, H., Levkovych, I. and Kroupova, Z. (2017) “Catching up or falling behind in Eastern European agriculture – the case of milk production”, Journal of Agricultural Economics, Vol. 68, No. 1, pp. 206-227. ISSN 1477-9552. DOI 10.1111/1477-9552.12193.
- Dakpo, K. H., Desjeux, Y., Jeanneaux, P. and Latruffe, L. (2019) “Productivity, technical efficiency and technological change in French agriculture during 2002-2015: a Färe-Primont index decomposition using group frontiers and meta-frontier”, Applied Economics, Vol. 51, No. 11, pp. 1166-1182. ISSN 0003-6846. DOI 10.1080/00036846.2018.1524982.
- Emvalomatis, G. (2012) “Productivity Growth in German Dairy Farming Using a Flexible Modelling Approach”, Journal of Agricultural Economics, Vol. 63, No. 1, pp. 83-101. ISSN 1477-9552. DOI 10.1111/j.1477-9552.2011.00312.x.
- Frick, F. and Sauer, J. (2016) “Deregulation and Productivity: Empirical Evidence on Dairy Production”, Paper presented on the annual meeting of Agriculture & Applied Economics Association, 31th July-2nd August 2016, Boston, USA.
- Grau, A. and Hockmann, H. (2016) “A new approach to identify market power along agri-food supply chains – the German dairy supply chain”, Paper presented on the annual meeting of Agriculture & Applied Economics Association, 31th July-2nd August 2016, Boston, USA.
- Irz, X. and Jansik, C. (2015) "Competitiveness of dairy farms in northern Europe: A cross-country analysis", Agricultural and Food Science, Vol. 24, pp. 206-2018. ISSN 1795-1895. DOI 10.23986/afsci.50881.
- Irz, X. and Thirtle, C. (2004) "Dual Technological Development in Botswana Agriculture: A Stochastic Input Distance Function Approach", Journal of Agricultural Economics, Vol. 55, No. 3, pp. 455-478. ISSN 1477-9552. DOI 10.1111/j.1477-9552.2004.tb00110.x.
- Jondrow, J., Knox Lovell, C. A., Materov, I. S. and Schmidt, P. (1982) “On the Estimation of Technical Inefficiency in the Stochastic Frontier Production Function Model”, Journal of Econometrics, Vol. 19, No. 2/3, pp. 233-238. ISSN 0304-4076. DOI 10.1016/0304-4076(82)90004-5.
- Keizer, T. H. and Emvalomatis, G. (2014) "Differences in TFP growth among groups of dairy farms in the Netherlands", NJAS-Wageningen Journal of Life Science, Vol. 70-71, pp. 33-38. ISSN 1573-5214. DOI 10.1016/j.njas.2014.03.001.
- Kumbhakar, S. C. (2011) “Estimation of production technology when the objective is to maximize return to the outlay”, European Journal of Operational Research, Vol. 208, pp. 170-176. ISSN 0377-2217. DOI 10.1016/j.ejor.2010.09.015.
- Kumbhakar, S. C. and Tsionas, E. G. (2009) “Stochastic error specification in primal and dual production systems”, Journal of Applied Econometrics, Vol. 26, pp. 270-297. ISSN 1099-1255. DOI 10.1002/jae.1100.
- Kumbhakar, S. C. and Tsionas, E. G. (2008) "Estimation of input-oriented technical efficiency using a nonhomogeneous stochastic production frontier mode", Agricultural Economics, Vol. 38, pp. 99-108. ISSN 1574-0862. DOI 10.1111/j.1574-0862.2007.00285.x.
- Kumbahakar, S. C., Lien, G., Flaten, O. and Tveteras, R. (2008) “Impacts of Norwegian Milk Quotas on Output Growth: A Modified Distance Function Approach”, Journal of Agricultural Economics, Vol. 59, No. 2, pp. 350-369. ISSN 1477-9552. DOI 10.1111/j.1477-9552.2008.00154.x.
- Kumbhakar, S. C. and Lozano-Vivas, A. (2005) “Deregulation and Productivity: The Case of Spanish Banks”, Journal of Regulatory Economics, Vol. 27, No. 3, pp. 331-351. ISSN 0922-680X. DOI 10.1007/s11149-005-6627-2.
- Lansink, A. O., Stefanou, S. and Serra, T. (2015) “Primal and dual dynamic Luenberger productivity indicators”, European Journal of Operational Research, Vol. 241, pp. 555-563. ISSN 0377-2217. DOI 10.1016/j.ejor.2014.09.027.
- Lansink, A. O., Silva, E. and Stefanou, S. (2000) “Decomposing productivity growth allowing efficiency gains and price-induced technical progress”, European Review of Agricultural Economics, Vol. 27, No. 4, pp. 497-518. ISSN 0165-1587. DOI 10.1093/erae/27.4.497.
- Latruffe, L., Bravo-Ureta, B. E., Moreira, V. H., Desjeux, Y. and Dupraz, P. (2011) “Productivity and Subsidies in European Union Countries: An Analysis for Dairy Farms Using Input Distance Frontiers”, Paper presented on the 12th congress of European Association of Agricultural Economists, 30th August-2nd September 2011, Zürich, Switzerland.
- Luik, H., Omel, R. and Viira, A.-H. (2011) "Efficiency and productivity change of Estonian dairy farms from 2001-2009", The article presented at congress EAAE: Change and Uncertainty Challenges for Agriculture, Food and Natural Resources, 30.8.-2.9.2011, ETH Zurich, Zurich, Švýcarsko.
- Madau, F. A., Furesi, R. and Pulina, P. (2017) "Technical efficiency and total factor productivity changes in European dairy farm sector", Agricultural and Food Economics, Vol. 5, No. 17, pp. 1-14. ISSN 2193-7532. DOI 10.1186/s40100-017-0085-x.
- Morrison Paul, C., Nehring, R., Banker, D. and Somwaru, A. (2004) "Scale Economies and Efficiency in U.S. Agriculture: Are Traditional Farms History?", Journal of Productivity Analysis, Vol. 22, No. 3, pp. 185-205. ISSN 0895-562X. DOI 10.1007/s11123-004-7573-1.
- Newman, C. and Mathews, A. (2007) "Evaluating the Productivity Performance of Agricultural Enterprises in Ireland using a Multiple Output Distance Function Approach", Journal of Agricultural Economics, Vol. 58, No. 1, pp. 128-151. ISSN 1477-9552. DOI 0.1111/j.1477-9552.2007.00084.x.
- Rasmussen, S. (2011) “Estimating the Technical Optimal Scale of Production in Danish Agriculture”, Paper presented on the 12th congress of European Association of Agricultural Economists, 30th August-2nd September 2011, Zürich, Switzerland.
- Sipiläinen, T., Kumbhakar, S. C. and Lien, G. (2014) “Performance of dairy farms in Finland and Norway from 1991 to 2008”, European Review of Agricultural Economics, Vol. 41, No. 1, pp. 63-86. ISSN 0165-1587. DOI 10.1093/erae/jbt012.
- Skevas, I., Emvalomatis, G. and Brümmer, B. (2018) “Heterogenity of Long-run Technical Efficiency of German Dairy Farms: A Bayesian Approach”, Journal of Agricultural Economics, Vol. 69, No. 1, pp. 58-75. ISSN 1477-9552. DOI 10.1111/1477-9552.12231.
- Špička, J. and Machek, O. (2015) "Change in the production efficiency of European specialized milk farming", Agricultural Economics – Czech, Vol. 61, No. 1, pp. 1-13. ISSN 1805-9295. DOI 10.17221/112/2014-AGRICECON.
- Wojciechowski, L. (2017) "Productivity Gap: A Chance or an Obstacle in Absorbing Benefits from FDI in a Host Country", Entrepreneurial Business and Economics Review, Vol. 5, No. 4, pp. 153-170. ISSN 2353-8821. DOI 10.15678/EBER.2017.050407.
- Zhu, X. and Lansink, A. O. (2009) "Determinants of productivity change of crop and dairy farms in Germany, the Netherlands and Sweden in 1995-2004", Paper presented at the International Association of Agricultural Economists Conference, 16.8.-22.8.2009, Beijing, China.
- Žáková Kroupová, Z. (2016) “Profitability development of Czech dairy farms”, Agricultural Economics-Czech, Vol. 62, pp. 269-279. ISSN 1805-9295. DOI 10.17221/131/2015-AGRICECON.