Dynamic energy efficiency assessment of dairy farming system in Iran: Application of window data envelopment analysis

Abstract

Livestock production systems, such as dairy farming, are one of the most important contributors to resource use and if not managed well, it can be environmentally detrimental. Iranian livestock sector faces a variety of the challenges such as high costs of energy and environmental legislations as well as an increasing demand for dairy products to respond the growing population. This paper aims to contribute to the discussion on technical efficiency as a key indicator of energy use within dairy farming systems. A Window Data Envelopment Analysis (W-DEA) with energy use as inputs and milk production as output was modelled with data from 25 provinces during the last 22 years (1994–2016) in Iran. In addition, the Slack-Based Model (SBM) was used to compare the radial DEA model with non-radial SBM, both in a dynamic environment (window analysis). The average efficiency score of Iranian dairy farming production system was estimated at approximately 0.85. Through the years, three provinces including Zanjan, Ardabil and Hormozgan had the highest technical efficiencies. Window analysis represented that provinces are distinctive in terms of their technical efficiencies and energy consumption over the years. Applying the SBM model improved the accuracy of the estimated efficiency scores compared to the radial (DEA) model. Further analysis represented a significant difference between the technical efficiency of different milk production levels. Provinces that produced higher volumes of milk had lower technical efficiencies. Based on the results it can be concluded that there is a substantial space for upgrading the technical efficiency of dairy farming in Iran by improving resource use efficiency which leads to an optimized energy consumption. It is recommended to reform Iranian livestock farming policies by applying mechanized systems, optimal strategies for water, electricity and fossil fuel consumption, use of renewable energy and better feed management while enhancing milk productivity and technical efficiency. In this respect, it is suggested that policy makers consider different indicators such as energy use efficiency and environmental impacts when allocating subsidies and resources to different provinces and farms.