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Unpacking Total Factor Productivity on Dairy Farms Using Empirical Evidence

Author

Listed:
  • Kehinde Oluseyi Olagunju

    (Economics Research, Agri-Food and Biosciences Institute, 18a Newforge Lane, Belfast BT9 5PX, UK)

  • Erin Sherry

    (Economics Research, Agri-Food and Biosciences Institute, 18a Newforge Lane, Belfast BT9 5PX, UK)

  • Aurelia Samuel

    (Economics Research, Agri-Food and Biosciences Institute, 18a Newforge Lane, Belfast BT9 5PX, UK)

  • Paul Caskie

    (Economics Research, Agri-Food and Biosciences Institute, 18a Newforge Lane, Belfast BT9 5PX, UK)

Abstract

This study examines the farm-level factors that influence differences in total factor productivity (TFP) on dairy farms. To this end, a fixed-effects regression approach is applied to panel data for dairy farms obtained from the Farm Accountancy Data Network for Northern Ireland over the period of 2005 to 2016. The findings are largely consistent with existing empirical evidence, showing that herd size, milk yield, stocking density, and share of hired labour have a positive and statistically significant impact on TFP, while labour input per cow, purchased feed input per cow, and share of direct payments in total farm output have a negative and statistically significant impact. The more complex relationships, namely age, education, and investment, have been unpacked using interaction terms and nonlinear approximation. The impact of age is negative, and the drag on productivity grows as age increases. Capital investment and education both have a positive impact on farm-level TFP, as well as on their interaction. Policy recommendations on strategies and best practices to help dairy farms tackle productivity constraints are suggested.

Suggested Citation

  • Kehinde Oluseyi Olagunju & Erin Sherry & Aurelia Samuel & Paul Caskie, 2022. "Unpacking Total Factor Productivity on Dairy Farms Using Empirical Evidence," Agriculture, MDPI, vol. 12(2), pages 1-13, February.
    • Handle: RePEc:gam:jagris:v:12:y:2022:i:2:p:225-:d:741894
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    References listed on IDEAS

    as
    1. Deep Mukherjee & Boris E. Bravo-Ureta & Albert De Vries, 2013. "Dairy productivity and climatic conditions: econometric evidence from South-eastern United States," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 57(1), pages 123-140, January.
    2. Alejandro Plastina & Sergio H. Lence & Ariel Ortiz‐Bobea, 2021. "How weather affects the decomposition of total factor productivity in U.S. agriculture," Agricultural Economics, International Association of Agricultural Economists, vol. 52(2), pages 215-234, March.
    3. Lajos Baráth & Imre Fertő, 2017. "Productivity and Convergence in European Agriculture," Journal of Agricultural Economics, Wiley Blackwell, vol. 68(1), pages 228-248, February.
    4. repec:zwi:journl:v:57:y:2013:i:1:p:123-140 is not listed on IDEAS
    5. Shingo Kimura & Johannes Sauer, 2015. "Dynamics of dairy farm productivity growth: Cross-country comparison," OECD Food, Agriculture and Fisheries Papers 87, OECD Publishing.
    6. Grigorios Emvalomatis, 2012. "Productivity Growth in German Dairy Farming using a Flexible Modelling Approach," Journal of Agricultural Economics, Wiley Blackwell, vol. 63(1), pages 83-101, February.
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    Cited by:

    1. Zhu, Ning & Streimikis, Justas & Yu, Zhiqian & Balezentis, Tomas, 2023. "Energy-sustainable agriculture in the European Union member states: Overall productivity growth and structural efficiency," Socio-Economic Planning Sciences, Elsevier, vol. 87(PA).

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