Economic resources versus the efficiency of different types of agricultural production in regions of the European union

Marta Guth,Katarzyna Smędzik-Ambroży

doi:10.1080/1331677x.2019.1585270

Abstract

Facing enormous differences in factor endowments across European agriculture the aim of the study was to identify the significance of differences in land, capital and labour endowments on the efficiency of different agricultural production types in the EU. The Ward Cluster Analysis was used to distinguish groups of EU regions, significantly differing in factor endowment, DEA model to determine the relative differences in technical efficiency of different types of agricultural production in EU regions and ANOVA analysis to assess the significance of differences in the efficiency of agricultural production types between these EU regions. It was found that generally the agriculture of the EU-12 regions was characterised in 2015 by higher efficiency of transforming inputs into effects than households in the EU-15 regions. Therefore, factor endowments play a significant role in transformation of production factors into effects. The article shows that there is a diversity of factor endowments in agriculture between EU region groups, which translates into differences in the technical efficiency of agricultural holdings of various types of production.

Highlights

It is primarily the utilisation of the production resources that determines the effects of farming
The Ward Cluster Analysis was used to distinguish groups of EU regions, significantly differing in factor endowment, data envelopment analysis (DEA) model to determine the relative differences in technical efficiency of different types of agricultural production in EU regions and analysis of variance (ANOVA) analysis to assess the significance of differences in the efficiency of agricultural production types between these EU regions
The supplies of production factors play an important role in agricultural production, which is in keeping with the producer’s objective function, which is the maximisation of profit, and in the case of farmers – of agricultural income

Summary

Introduction

It is primarily the utilisation of the production resources that determines the effects of farming. The prices of goods are determined by the cash costs of production comprising wages/salaries, pensions, and profits as the remuneration of the traditional production factors, labour, land, and capital, respectively. Say, who noticed the value-creating role of capital and land, rejecting value theories based solely on labour According to the above theories, the supplies of production resources determine the

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Conclusion