Are there economies of inputs in mixed crop-livestock farming systems? A cross-frontier approach applied to French dairy-grain farms

In this study, we test the hypothesis that mixed crop-livestock farms realize economies of inputs. To do so, we use the standard cross-frontier model to evaluate overall input efficiencies and develop a slacks-based (SB) cross-frontier model to evaluate input-specific efficiencies of mixed farms related to the best practice production frontier of specialized farms. These models are applied to an unbalanced panel with 825 observations on 247 French farms from 1991 to 2011. Regarding the standard cross-frontier framework, we find that 72% of the mixed farms exhibit diseconomies of inputs. This suggests that the mixed production technology is largely dominated by the specialized one in terms of input savings. Under the SB cross-frontier model, we find that the mixed farms exhibit, on average, diseconomies of inputs for each of their production factors. We also find that almost a quarter of the mixed farms realizes economies of inputs on the use of labour, fertilizers, and pesticides. Finally, regression results indicate that public subsidies and farm size are negatively associated with the probability of observing input economies. This suggests that, for our sample, the concept of mixed crop-livestock farming faces structural and socio-economic realities, mainly regarding farm size and public subsidies.