Estimation of Treatment Effects of Recombinant Bovine Somatotropin Using Matching Samples

The production and profit impacts of recombinant bovine somatotropin (rbST) on select New York dairy farms were estimated using data over the years 1994 through 2004, by comparing matching farms that use and do not use rbST. The use of rbST increases milk production per cow and decreases the cost of production per hundredweight of milk. The cost penalty (cost reduction) is $0.39 per hundredweight for those currently using rbST to stop using rbST, while the average treatment effect is $0.73.     

Productivity of New York Dairy Farms Measured by Nonparametric Malmquist Indices

The productivity of 70 individual New York dairy farms, decomposed into technical efficiency change and technological change components, was measured annually from 1985 to 1993 from output distance functions estimated using nonparametric programming methods. Technology is measured regressively only if it is regressive to all previous periods rather than just the immediate previous period. Productivity increase averaged 2.6 per cent annually, mostly from gains in technological improvements, since average efficiency decreased slightly. Twenty-five per cent of the farms failed to increase productivity sufficiently over the period to offset the decreased ratio of output to input prices.     

Cost and environmental efficiency of rice farms in South Korea

We examine cost and nutrient use efficiency of farms and determine the cost to move farms to nutrient‐efficient operation using Data Envelopment Analysis (DEA) with a dataset of 96 rice farms in Gangwon province of South Korea from 2003 to 2007. Our findings show that improvements in technical efficiency would result in both lower production costs and better environmental performance. It is, however, not costless for farms to move from their current operation to the environmentally efficient operation. On average, this movement would increase production costs by 119% but benefit the water system through an approximately 69% reduction in eutrofying power (EP). The average estimated cost of each EP kg of aggregate nutrient reduction is approximately one thousand two hundred won. For technically efficient farms, there is a trade‐off between cost and environmental efficiency. We also find that the environmental performance of farms varies across farms and regions. We suggest that agri‐environmental policies should be (re)designed to improve both cost and environmental performance of rice farms.     

Will Voluntary and Educational Programs Meet Environmental Objectives? Evidence from a Survey of New York Dairy Farms

This paper presents the results from a survey of New York dairy farms that links manure management practices and farmer willingness to participate in voluntary environmental programs, focusing on those operations that are not automatically designated as Concentrated Animal Feeding Operations. A wide divergence is found between actual and recommended manure management practices on individual dairy farms (high), the apparent ability of farms to divert financial resources to environmental practices (mixed), and the willingness to participate in voluntary programs at various annual costs per cow (low). These findings have policy implications for the USDA/USEPA National Strategy for Animal Feeding Operations.     

Comparative Advantage Indices of Selected Livestock Production Sectors in Brunei Darussalam

Abstract

This study calculates the protection rates and comparative advantage indices of livestock industry in Brunei from an import substitution perspective. Four livestock sub-sectors were being evaluated: broiler, layer, goat and beef cattle. Two measures of government intervention indices were calculated, namely nominal protection rate (NPR) and effective protection rate (EPR). Domestic resource cost (DRC) and resource cost ratio (RCR) indices were computed to determine the comparative advantages of the livestock industry. In general, the results indicate that the livestock industry in Brunei was heavily protected. The study revealed the existence of comparative advantage only for very large farms producing poultry meat and eggs. Similarly in the ruminant sector, goat production appears to have comparative advantage over beef cattle. Small and medium poultry farms and large non-ruminant farms and cattle beef production possess comparative disadvantage despite being highly protected industries.     

On the nature and magnitude of cost economies in hog production

In this article, we assess the impact of farm size on production cost and evaluate the marginal costs and margins by considering that input prices may change with the scale of production. By using French hog farm data, we estimate a system of equations including a feed price function, input demand functions, and an output supply function based on a technology approximated by a combined generalized Leontief‐Quadratic form. Our results suggest that the marginal costs are over‐estimated when the adjustment of the feed unit prices to a change in farm size is not controlled for. More specifically, the cost economies for large farms (enjoying the highest profits) arise primarily from lower feed prices, with technological scale economies having little impact. In contrast, farms with no hired labor exhibit technological scale economies and reach higher price‐cost margins compared to larger farms.     

Scale Efficiency in the New Zealand Dairy Industry: a Non-parametric Approach

The aim in this article is to measure the scale efficiency of the New Zealand dairy industry and to examine the relationship between farm size and technical efficiency. Data envelopment analysis (DEA) is applied to a sample of 264 dairy farms. The results suggest that 19 per cent of these farms are operating at optimal scale, 28 per cent at above optimal scale, and 53 per cent at below optimal scale. On average, the optimal size for New Zealand dairy farms is estimated at 83 hectares with a herd of 260 animals. Average technical efficiency is estimated at 89 per cent.     

MANAGEMENT AND SIZE ECONOMIES IN THE ENGLAND AND WALES DAIRY SECTOR

Analyses of size economies in the England and Wales dairy sector have generally been made on the basis of comparisons of input-output measures. These measures have been classified according to input use and farm size and have led to conclusions about efficiency and structural change. This paper examines the influence of managerial ability on economies of size using econometrically estimated long-run average cost (LAC) functions from Milk Marketing Board data for 1980/1. The results show that the LAC curve is U-shaped though skewed to exhibit greater economies than diseconomies of size. Better managed farms are shown to produce any given level of output at lower average cost. Moreover, they have larger optimal levels of output.     

Sources of productivity growth on Finnish dairy farms—application of an input distance function

The objective is to examine sources of productivity change on Finnish dairy farms in the 1990s. The decomposition of productivity change into technical and technical efficiency change is widely recognized but it neglects the scale effect. Generalized decompositions incorporating all three components are calculated for a sample of Finnish dairy farms from 1989-2000. This period is of interest because of the drastic change in agricultural policy when Finland joined the European Union (EU) in 1995. The results indicate that productivity growth was on average low, approximately 0.15% per year. Neutral technical change was identified as the most important source of productivity growth (1.1%). Technical efficiency decreased by almost 0.5% annually. The contribution of the scale effect in productivity change increased towards the end of study period.     

Expected Economic Effects of BST in The Netherlands

The calculated profitability of using Bovine Somatotropin (BST) on typical dairy farms in The Netherlands ranges from Dfl.160 to 300 per cow per year, assuming 1985 prices and circumstances, and ignoring the costs of BST. A 20% increase in milk production and no change of the feed/milk relation were used for the calculations. BST is more profitable on intensive farms or on farms with more opportunities for alternative uses of land, buildings and labour. The quota system, however, leads to a considerable reduction of profitability. At a national level, and with an unchanged milk price, a 28% adoption rate of BST would increase national income about Dfl.120 million. However, the cost of BST or any decrease in milk price could reduce this amount, even to below zero. It is apparent that some dairy farmers who apply BST will earn more income whereas others will lose income.     

Decomposition of output growth in the Tunisian olive-growing sector: A frontier production function approach

The aim of this paper is to investigate the relative contribution of technical efficiency, technological change, and increased input use to the output growth of the Tunisian olive oil growing farms, using a stochastic frontier production function approach applied to panel data for the period 1995-1997. The proposed methodology is based on the use of a flexible translog functional form. Results indicate that technical efficiency of production in the sample of olive producing farms investigated ranges from a minimum of 24.8% to a maximum of 84.6% with an average technical efficiency estimate of 48.5%. This suggests that olive producers may increase their production by as much as 51.5% through more efficient use of production inputs. Further, the production is characterized by decreasing returns to scale, which on average was 0.8. Finally, investigation of the sources of production growth reveals that the contribution of conventional inputs (labor, in particular) and technical change are found to be the main source of that growth, since total factor productivity increased during the study period, but at a slowing rate.     

Exploring Farm Investment Behaviour in Transition: The Case of Russian Agriculture

This paper analyses the investment behaviour of Russian farms during the period of economic stabilisation that followed Russia’s financial crisis of 1998, and is the first to apply the error‐correction investment model to describe farms’ investment behaviour in the transitional context. Additionally, the paper employs the error‐correction and the adjustment‐cost model to test for differences in the investment behaviour between various farm categories. The results show that in general Russian farms exhibited an error‐correcting behaviour in the period under investigation. From 1999 to 2005 the output–capital gap was closed by an average rate of 10% per year. Estimates of the adjustment‐cost model show that Russian farm investments are very sensitive to the sales–capital ratio, suggesting that Russian farms exhibit increasing returns to scale and positive expectations about future revenues. Yet, such farm characteristics as ownership structure, access to input markets and also regional specifics were found to be decisive for farm investment not only in the short but long term too. Finally, the results show that the adjustment‐cost model is adequate for the evaluation of differences in short‐term investment behaviour, whereas it is noticeably less powerful for investigating differences in the farms’ long‐term investment behaviour.     

Empirical evaluation of nonpoint pollution policies under agent heterogeneity: regulating intensive dairy production in the Waikato region of New Zealand*

Models used for policy evaluation rarely consider firm heterogeneity, despite its importance for instrument design. This study considers agent heterogeneity explicitly in the evaluation of policies for nonpoint pollution control through the integration of decomposition and calibration procedures for programming models. The application concerns the regulation of nitrate leaching from intensive dairy production in the Waikato region of New Zealand. Failing to represent firm heterogeneity leads to widely different estimates of mitigation costs, relative to where heterogeneity is considered. Variation in baseline emissions and the slopes of abatement cost curves between firms renders a differentiated policy less costly than a uniform standard. However, the relative values of these policies are not broadly different, as firms required to do the most abatement – intensive farms with large baseline pollutant loads – can do so more cheaply, on average.     

甘肃省家庭林场经营效率比较分析

基于2018年甘肃省集体林改监测课题组实地调查数据,运用DEA模型对4种类型家庭林场的经营效率进行比较分析。结果表明:甘肃省家庭林场经营效率整体偏低,不同类型间存在较大差异,经营效率相对较高的是林下养殖型和多功能型家庭林场;各类型家庭林场投入变量都存在不同程度的冗余;家庭林场的经营效率和经营规模关联度不高,更多受技术因素影响。相对而言,种养结合型家庭林场经营面积在0～6.67 hm~2和20～33.33 hm~2,多功能型经营面积在6.67～10.31 hm~2和24.45～25.80 hm~2,能发挥集约优势或规模优势。因此,提出加强对家庭林场主的技术培训;鼓励有实力的家庭林场进行规模化、集约化发展;鼓励种植型家庭林场等拓展经营内容;打造多种功能经营,打造品牌特色等建议。     

Technical efficiency and impact of environmental regulations in farrow-to-finish swine production in Taiwan

This article demonstrates how technical efficiency and the impact of environmental regulations of Taiwanese farrow‐to‐finish swine production can be estimated in the presence of undesirable outputs. The issue of measuring technical efficiencies while considering undesirable outputs has been addressed by past studies. But the proper method of including undesirable outputs has always been a subject of debate. This article develops a data envelopment analysis (DEA)‐based model that includes undesirable outputs. The technologies of desirable output production and undesirable output control are considered simultaneously. This allows one to transform undesirable output into desirable output, whereby a traditional Shephard distance function can be used to measure technical efficiencies. An approach to measuring the impacts due to environmental regulations is then derived. Empirical results show that larger farms are more technically efficient than small‐sized farms, but no clear conclusions can be reached for the measures of regulatory impact among farms with different sizes. On average, the sample farms incurred an opportunity cost due to environmental regulations equivalent to 9.8% of market value. Opportunity costs rise with efficiency.     

Productivity and international competitiveness of agriculture in the European Union and the United States

This study looks at international competitiveness of agriculture in the European Union and the United States. The most intuitive concept is that of price competitiveness. We calculate relative prices for 11 member states of the European Union and the United States for the period 1973–2002. We assume that markets are perfectly competitive and in long‐run equilibrium, so that the observed price always equals average total cost, as measured by the cost dual to the production function. This assumption is used in our calculation of relative competitiveness and productivity gaps between the European Union and the United States and in our decomposition of relative price movements between changes in relative input prices and changes in relative productivity levels.     

Gains and structural effects of exploiting scale-economies in Norwegian dairy production

In this paper, we present calculations of the economic gains in terms of reduced costs by exploiting scale‐economies in dairy production in Norway, and the effect this would have had on the number of farms. We also explore whether or not optimal scale and unexploited scale‐economies change over time due to scale‐augmenting technical change. The analysis is based on homothetic cost functions estimated by means of data for individual dairy farms for the period 1972–1996. For 1972, we find that, by full exploitation of scale‐economies, the costs could have been reduced by almost 40%, while the number of farms would have been reduced by more than 85%. The number of small farms has been substantially reduced in the period considered. This fact, combined with small scale‐augmenting technical change, implies that the gains and structural effects of exploiting scale‐economies have decreased over time. In 1996, costs could have been reduced by close to 30% by full exploitation of scale‐economies, while the number of farms would have been reduced by slightly more than 70%. Thus, both gains and structural effects are substantially less than in 1972. Nevertheless, the calculated gains for 1996 make almost 5 billion NOK. This corresponds almost exactly to the total public support to the dairy farms in 1996. The unexploited scale‐economies are largely due to the agricultural policy. Thus, a substantial share of the same can be considered as part of the‘price’ the Norwegian society has to pay for this policy. In addition, there are likely to be large hidden costs of this policy due in particular to the quota system and other direct production regulations. They imply that technical innovations and other efficiency‐improving investments requiring increased production to be profitable are not carried out. This is the more likely explanation for the extremely poor efficiency development in Norwegian dairy production in the period studied.     

Enhancing productivity on suburban dairy farms in China

Dairy farms in China's suburban areas have been playing an important role in providing urban markets with fresh milk. With the rising demand for fluid milk and dairy products in the cities, there is a perception that small and scattered dairy farms in China's provinces are gradually disappearing and more concentrated dairy cattle farming is being formed near suburban areas. This article uses farm‐level survey data and stochastic input distance functions to make estimates of total factor productivity (TFP) on suburban dairy farms, as well as for the entire dairy sector. The results show that over the past decade TFP growth has been positive on suburban dairy farms, and this rise in productivity has been driven mostly by technological change. However, at the same time we find that, on average, the same farms have been falling behind the advancing technical frontier. We also find one of the drivers of the suburban dairy sector is the relatively robust rate of technological change of these farms, which has been more rapid than on farms in the dairy sector as a whole. The results suggest that efforts to achieve greater adoption of new technologies and better advice on how to use the technologies and manage production and marketing within the suburban dairy sector will further advance productivity growth in the sector.     

Impact of CAP Subsidies on Technical Efficiency of Crop Farms in Germany,the Netherlands and Sweden

This paper analyses the impacts of CAP reforms, particularly subsidies on technical efficiency of crop farms. An output distance function is employed and estimated together with an inefficiency effects model to capture the effects of CAP subsidies and farmer characteristics on farm efficiency. The model is applied to FADN data (period 1995–2004) of crop farms in Germany, the Netherlands and Sweden. The study shows that the 10‐year average technical efficiency is 64% in Germany, 76% in the Netherlands and 71% in Sweden. The average annual changes in technical efficiency are 0.1%, 0.4% and 2.3%, respectively. The share of crop subsidies in total subsidies has a negative impact on technical efficiency in Germany but a positive impact in Sweden, although insignificant in the Netherlands. The share of total subsidies in total farm revenues has negative impacts on technical efficiency in all three countries, consistent with income and insurance effects. Positive (negative) change in technical efficiency is mainly attributable to farm size (degree of specialisation) in Germany, and degree of specialisation (degree of subsidy dependence) in the Netherlands and Sweden.