Farm productivity gains in the European Union : a microeconomic analysis

Details

Supervisors

Henry de Frahan, Bruno

Faculty

Faculté des bioingénieurs

Degree label

Master [120] : bioingénieur en sciences agronomiques

Abstract

Throughout this work, we develop a microeconomic framework for estimating a theoretically consistent, well-behaved, multi-input, multi-output cost function, according to a flexible Symmetric Generalized McFadden (SGM) functional form. Hence, several productivity-related indicators can be computed for their use in a profound productivity analysis. The capabilities of this framework are illustrated by an analysis of the productivity gains achieved by the crop farms located in the three most important regions for cereal production in the European Union, i.e., West and Central France and Central Spain, using microeconomic data obtained by the EU-Farm Accountancy Data Network (EU-FADN) during the period 1989 – 2011. The analysis reveals considerable differences across these regions, mainly regarding their evolutionary patterns. In particular, the regions of West France and Central Spain exhibit an alarming downward sloping trend in their rates of cost diminution and technical change. In a final stage, we attempt to identify several determinants underlying the estimated productivity gains by establishing several correlation-coefficients. We find that a larger farm size does not necessarily attribute to higher productivity gains. Also, higher degrees of farm specialization and land ownership are positively correlated with productivity gains in all investigated regions, whereas a negative correlation is found for the yields of cereal production. Finally, we note that productivity indicators can differ significantly amongst subregions and that a positive correlation can be established between output prices and farm productivity gains, with an exception for the region of West France.