A Metafrontier Analysis on the Performance of Grain-Producing Regions in Norway

Habtamu Alem

doi:10.3390/economies9010010

Abstract

Previous application of the stochastic frontier model and subsequent measurement of the performance of the crop sector can be criticized for the estimated production function relying on the assumption that the underlying technology is the same for different agricultural systems. This paper contributes to estimating regional efficiency and the technological gap in Norwegian grain farms using the stochastic metafrontier approach. For this study, we classified the country into regions with district level of development and, hence, production technologies. The dataset used is farm-level balanced panel data for 19 years (1996–2014) with 1463 observations from 196 family farms specialized in grain production. The study used the true random effect model and stochastic metafrontier analysis to estimate region level technical efficiency (TE) and technology gap ratio (TGR) in the two main grain-producing regions of Norway. The result of the analysis shows that farmers differ in performance and technology use. Consequently, the paper gives some regionally and farming system-based policy insights to increase grain production in the country to achieve self-sufficiency and small-scale farming in all regions.

Highlights

The main objectives of Norwegian agricultural and food policies are agricultural production in all parts of the country; food security; creating more added value, and sustainable production with reduced greenhouse gas emissions
This study aims to measure the performance and regional technology gaps of Norwegian crop-producing farms located in different regions
This paper aimed to measure the performance and regional technology gaps of Norwegian crop-producing farms located in different regions

Summary

Introduction

The main objectives of Norwegian agricultural and food policies are agricultural production in all parts of the country; food security; creating more added value, and sustainable production with reduced greenhouse gas emissions. The Norwegian government supports farmers in achieving the abovementioned objectives, and the sector is so heavily subsidized that, without support, it would not be competitive with imports. There is a threat that Norway may be obliged, by international pressures, to cut back on border protection and output-related subsidies, which might force the Norwegian agricultural policy toward more competitive agriculture. To achieve food and nutrition security at a national level, there is a need to improve the performance of farmers in all regions of Norway. Improving the performance of farmers is a key contributor to the efficient use of resources and overall productivity growth in the Norwegian economy (Lien et al 2010)

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Conclusion