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Technical efficiency analysis and decomposition of productivity growth of Spanish olive farms

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  • Lambarraa, Fatima
  • Serra, Teresa
  • Gil Roig, Jose Maria

Abstract

The concept of technical efficiency is critical to measuring the firm performance, determining the degree of innovative technology adoption and the overall production efficiency. Traditionally, technical efficiency has been measured as the ratio of observed output to maximum feasible output. Stochastic frontier models have been widely utilized to assess this issue. Our research evaluates technical efficiencies in the Spanish olive sector. Specifically, the main objective of this study is to estimate a stochastic frontier production model by using a farm- level panel of data. The non- negative technical efficiency effects are assumed to be a function of firm- specific variables. A sample of Spanish farms observed from 1999 to 2002 is obtained from the FADN dataset and used in the estimation of the model. Maximum- likelihood methods are applied in the estimation of the parameters of the model. A primal approach is used to decompose Total Factor Productivity (TFP) growth. Results indicate that farm location, age of manager, tenure regimes of land and whether the farm has adopted organic farming techniques affect efficiency levels . Technical efficiency change, allocative efficiencies and scale effects are found to be the main sources of TFP growth, while technical change seems to be of minor importance. Results also suggest that Spanish olive farms are less efficient relative to other EU farms. This suggests that improvements in the Spanish olive productive capacity after the accession to the EU were not fully implemented in the period of analysis. This may be due to a decline in olive farm incomes as a result of a decline in both public subsidies and in output prices after the mid 1990s.

Suggested Citation

  • Lambarraa, Fatima & Serra, Teresa & Gil Roig, Jose Maria, 2006. "Technical efficiency analysis and decomposition of productivity growth of Spanish olive farms," 98th Seminar, June 29-July 2, 2006, Chania, Crete, Greece 10071, European Association of Agricultural Economists.
    • Handle: RePEc:ags:eaae98:10071
    DOI: 10.22004/ag.econ.10071
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    References listed on IDEAS

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    Cited by:

    1. Maria Raimondo & Francesco Caracciolo & Concetta Nazzaro & Giuseppe Marotta, 2021. "Organic Farming Increases the Technical Efficiency of Olive Farms in Italy," Agriculture, MDPI, vol. 11(3), pages 1-15, March.
    2. Jara-Rojas, Roberto & Bravo-Ureta, Boris & Solis, Daniel & Martinez, Daniela, 2016. "Production efficiency and commercialization channels among small-scale farmers: Evidence for raspberry production in Central Chile," 2016 Annual Meeting, February 6-9, 2016, San Antonio, Texas 229330, Southern Agricultural Economics Association.
    3. Ioanna G. Gkiza & Stefanos A. Nastis, 2017. "Health and Women’s Role in Agricultural Production Efficiency," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 39(3), pages 428-440.
    4. Dios-Palomares, Rafaela & Martínez-Paz, José M., 2011. "Technical, quality and environmental efficiency of the olive oil industry," Food Policy, Elsevier, vol. 36(4), pages 526-534, August.
    5. Antonio Alberto Rodríguez Sousa & Jesús M. Barandica & Pedro A. Aguilera & Alejandro J. Rescia, 2020. "Examining Potential Environmental Consequences of Climate Change and Other Driving Forces on the Sustainability of Spanish Olive Groves under a Socio-Ecological Approach," Agriculture, MDPI, vol. 10(11), pages 1-22, October.
    6. Jara-Rojas, Roberto & Bravo-Ureta, Boris E. & Solis, Daniel & Arriagada, Daniela Martinez, 2017. "Technical Efficiency and Marketing Channels Among Small-Scale Farmers: Evidence for Raspberry Production in Chile," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 21(3), November.

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