Work

How Can Overinvestment in Farms Affect Their Technical Efficiency? A Case Study from Poland

Year: 2024

Type: article

Abstract: Farm overinvestment is highly dangerous in how it affects productivity and profitability. Therefore, it imperatively needs to be measured in the context of investment support offered under the Common Agricultural Policy. In turn, technical efficiency is one of the best methods for measuring farm investment. This paper analyzes the technical efficiency of 3273 Polish farms based on unpublished FADN (Farm Accountancy Data Network) data from 2010–2019. The purpose of this study was to indicate the level of, and changes in, technical efficiency of Polish farms in function of their investment levels, with particular emphasis on overinvested holdings. Technical efficiency was examined using stochastic frontier analysis (SFA). The study proved a decline in technical efficiency in underinvested farms and in those affected by absolute overinvestment (i.e., ones where the assets-to-labor ratio grows while labor productivity drops).

Source: Agriculture

DOI: 10.3390/agriculture14101799

Authors: Jagoda Zmyślona, Arkadiusz Sadowski, Krzysztof Piotr Pawłowski

Institution: Poznań University of Life Sciences

Language: English

Topic: Efficiency Analysis Using DEA

Subfield: Management Science and Operations Research

Field: Decision Sciences

Domain: Social Sciences

SDG: Zero hunger

Open Access status: gold

Estimated APC paid: $2,955