Farmers' Knowledge Attributes Contribute to Attaining Higher Farm Technical Efficiency: A Transition Economy Case

Abstract

Purpose: This study sought to explore how farmers' knowledge attributes influence the technical efficiency of their farms. In addition, farm efficiency was compared to the actual Macedonian Rural Development Programme (RDP) (2007–2013) and instruments considered to improve Macedonian education potential were evaluated. Design/methodology/approach: The three-year (2006–2008) panel data set on Macedonian grape-producing family farms were analysed. A two-stage approach for efficiency analysis was used. In the first stage, technical efficiency scores were estimated using a parametric Stochastic Frontier approach. In the second stage regression, the impact of farmers' knowledge attributes on farm efficiency was assessed. Findings: The results suggest that farmers' knowledge attributes have the potential to influence farm economic performance. Non-formal knowledge sources, such as seminars, and competence-based learning appeared to be key to achieving higher technical efficiency. Within the instruments used for strengthening the knowledge potential of Macedonian farmers, supporting non-formal education and young farmers' enrolment in agricultural production should remain priorities. Practical implications: As the study relates to specific RDP instruments, it is of practical importance for policy-makers and knowledge-providing systems. Originality/value: The study is of value in explaining the knowledge potential of farmers working in transition economies and its importance for attaining higher efficiency. Despite the evidence on the importance of knowledge in strengthening farm performance, the influence of educational practices and potential knowledge attributes on farm efficiency has not previously been analysed in the context of an economy in transition.