Identification of efficient dairy farms in Greece based on home grown feedstuffs, using the Data Envelopment Analysis method

Abstract

The aim of this study was the evaluation of the efficiency of dairy cow farms in Greece using the nonparametric method of Data Envelopment Analysis (DEA). To achieve the aim of this empirical analysis, two basic models were developed: one using the hypothesis of Constant Return to Scale (CRS) and the other using Variable Return to Scale (VRS). The models were output oriented (milk yield) at a constant level of technology and production factors used (nutritional value of procured or home grown animal feed, hours of human labour, value of livestock, average invested capital – including land). The results have shown that 87.2% of the farms in the sample were inefficient with an inefficiency scale between 22.09% and 100% with an average of 82.73% and a standard deviation of 19.90%. It is obvious from the results’ analysis that the farms, at the level of inputs used, can increase their output (milk yield), therefore improving their competitiveness.