Technical and scale efficiency of crop and livestock farms in Poland: does specialization matter?

TLDR

Improvements in land lease legislation and changes to farmers' pension support could stimulate the land market and reduce incentives for fragmented operations. The study analyzes the technical and scale efficiency of Polish farms using data envelopment analysis. Efficiency differences were measured by farm specialization (crop versus livestock) at 1996 and 2000, and results were evaluated using bootstrapped confidence intervals. Livestock farms are, on average, more technically and scale efficient than crop farms, with high scale efficiency for both types, and technical inefficiency mainly stems from pure technical factors linked to inefficient management and low educational attainment, while in 2000 64% of livestock and 86% of crop farms operated under increasing returns to scale.

Abstract

Abstract The technical and scale efficiency of Polish farms is analyzed using data envelopment analysis. Efficiency differences are measured according to farm specialization, in crop or livestock, at two points in time during transition, 1996 and 2000. The efficiency results are reviewed in light of confidence intervals provided by bootstrapping. Livestock farms are found to be, on average, more technically and scale efficient than crop farms. Scale efficiency is high for both specializations. Technical inefficiency appears mostly to be due to “pure technical” rather than “scale” inefficiency, and thus attributable to inefficient management practices. The evidence suggests that the low‐educational attainment of people engaged in agriculture is one important reason for these inefficient practices. In 2000, 64% of livestock farms and 86% of crop farms were operating under increasing returns to scale. Improvements in the land lease legislation and changes to the policy support to farmers' pensions could stimulate the land market and remove the incentives to keep a fragmented operational structure.