Efficiency analysis in a sample of PGI bean producers in Greece

Abstract

(ProQuest: ... denotes formulae omitted.)1. IntroductionThe voluntary participation by EU farmers in quality assurance schemes for agricultural products of geographical origin is growing, as it offers substantial benefits through product and market differentiation and the creation of market niches. In addition, the intrinsic link between a quality label and a geographical location creates positive externalities for the whole region through the added value gained by producers and a collective reputation that benefits other local products, as well as tourism. A large number of the European foodstuffs bearing such labels are produced in less advantaged often mountainous regions and the external benefits associated with quality labels are greatly valued for their effect on rural development (IP/B/AGRI/IC/2012-067 PE 495.856 EN; BUREAU and VALCESCHINI, 2003).Greece has 101 quality labeled products, PDO (protected designation of origin) and PGI (protected geographical indication) of plant or animal production, which brings it in the fifth place in terms of the number of certified goods in the EU, yet accounts for a market share only a little above 1% within the European market(Reg. (EU) No 1151/2012; ec.europa.eu/agriculture/quality/door). Three of the 27 Greek PGI commodities are dry beans produced in the northwestern part of the country. In particular, two of them are produced around the Prespes lake area in the province of Florina, a geograph- ical area with unique geomorphological and climate conditions, and the third one is produced in the next by province of Kastoria. Their shares in the regional bean production are around 60% and 40%, respectively (ELSTAT, 2011; FAO, 2013). Approximately 230 farms produce the two types of dry beans within the designated geographical zone in the province of Frorina and 212 in the province of Kastoria.Bean cultivation has been declining over the last three decades in Greece from 33.900 ha in 1980, to less than a third (9.062 ha in 2013), with production dropping from 42.040 tons by about 40% (25.000 tons). In the 1980's Greece was self-sufficient in that product exporting minor quantities, yet, today there is a trade deficit with local production covering about 60% of the country' s needs and main sources of imports are the USA, Canada, Albania and Argentina. Against these, the introduction of the EU policy on quality schemes for agricultural products and foodstuffs, turned out to be very favorable for three bean producing areas that opted for the certification of their local bean varieties and gained a comparative advantage. However, in recent years there has been limited growth in both the area under cultivation and bean production in the region, despite the advantages provided by the PGI label.The aims of this paper is to examine the extent and the sources of inefficiency in the production of PGI dry beans in the province of Florina using a representative sample of almost half of the population of PGI dry beans farmers in the province. For these purposes we employ Data Envelopment Analysis (DEA) and we estimate efficiency scores at both the individual and the aggregate level. For the former we estimate productive, technical and scale efficiency and for the latter we impute, using the individual scores, aggregate and structural efficiency. We further explore the characteristics of the best practice peer group by means of metrics such as their reference and benchmarking shares. These would provide policy makers with helpful insights about the profile of successful operators that may help local producers to improve their performance and in turn their farm income.In the efficiency literature, a fairly limited number of papers refer to quality labeled production. DIMARA et al. (2005) considered the production of black currant in Greece and estimated farm efficiency in two distinct quality schemes, namely conventional production under a PDO label and organic farming inside or outside the PDO zone, with only the former farming practice's efficiency being affected by the PDO status. …