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Productivity and efficiency in Czech agriculture: Does farm size matter?

Author

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  • Lukáš Čechura

    (Department of Economics, Faculty of Economics and Management, Czech University of Life Sciences Prague, Prague, Czech Republic)

  • Zdeňka Žáková Kroupová

    (Department of Economics, Faculty of Economics and Management, Czech University of Life Sciences Prague, Prague, Czech Republic)

  • Michaela Lekešová

    (Institute of Agricultural Economics and Information, Prague, Czech Republic)

Abstract

This paper deals with the sources of total factor productivity (TFP), namely technical efficiency, scale efficiency, and technological change, considering the size of agricultural producers and using balanced panel data in the period 2014-2018 drawn from the Farm Accountancy Data Network (FADN) database for three sectors of Czech agriculture - cereals, milk, and beef. The investigation is based on the stochastic frontier (SF) modelling of an input distance function (IDF) with four error components (heterogeneity, statistical noise, persistent and transient inefficiency). The sector-specific models are estimated by a four-step estimating procedure with a system generalised method of moments (GMM) estimator to address the endogeneity problem. The results reveal inter- and intra-sectoral differences in productivity drivers. In particular, the smallest producers lag considerably behind the largest ones due to the scale effect (SEC). While large farms should focus on technological change, improvements in scale and technical efficiency have been identified as the main sources of coping with productivity losses for small farmers.

Suggested Citation

  • Lukáš Čechura & Zdeňka Žáková Kroupová & Michaela Lekešová, 2022. "Productivity and efficiency in Czech agriculture: Does farm size matter?," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 68(1), pages 1-10.
    • Handle: RePEc:caa:jnlage:v:68:y:2022:i:1:id:384-2021-agricecon
    DOI: 10.17221/384/2021-AGRICECON
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    2. Bo Peng & Rasa Melnikiene & Tomas Balezentis & Giulio Paolo Agnusdei, 2024. "Structural dynamics and sustainability in the agricultural sector: the case of the European Union," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 12(1), pages 1-27, December.

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