Measurement and Evaluation of the Efficiency and Total Productivity of Dairy Farms in Poland

Michał Świtłyk,Agnieszka Kurdyś-Kujawska,Agnieszka Sompolska-Rzechuła

doi:10.3390/agronomy11112095

Abstract

The aim of the article is to measure and evaluate the economic and technical efficiency as well as the total productivity of dairy farms in Poland. The research used data from the Polish FADN. The analysis covered the years 2008–2017. The study group consisted of 730 farms. An iteration-optimization method, k-means clustering, non-parametric DEA method, and aggregated Färe–Primont indexes were used to achieve the goal. The conducted research allowed for the distinction of four types of dairy farms with different levels of economic efficiency. We prove that the costs of labor, energy, maintenance of machines and buildings, fodder, depreciation, and overheads, as well as agricultural land, affect the technical efficiency and total productivity of dairy farms. We also prove that over the analyzed years, technical efficiency decreased in all groups of dairy farms, while the Färe–Primont index of total productivity changes slightly increased. The validity of these studies and their practical significance result from the need to improve the competitiveness of dairy farms and increase their profitability. Our research fills a gap in research on measuring and evaluating the efficiency and productivity of dairy farms, and at the same time represents an original approach to the studied phenomenon. Moreover, it allows for the explanation of differences in the effectiveness of different types of dairy farms, providing useful information for the design of effective targeted policy interventions to improve the competitiveness of the Polish dairy sector. There are opportunities to improve both the technical efficiency and productivity of dairy farms in Poland. This increase will be possible thanks to the improvement of agricultural advisory services and ensuring that farmers participate in training in proper nutrition, reproduction, milk marketing and other management skills.

Highlights

The EU dairy sector, including Poland, is currently facing several challenges resulting from growing global demand, the volatility of licenses, or the feed crisis caused by climatic changes
The results indicate that the intensification of the use of complementary feeds, farm size, herd size, farm location, frequency of milking, labor costs, other costs are important factors influencing the technical efficiency of New Zealand dairy farms
The results of the analysis indicate the identification of four types of dairy farms with different levels of economic efficiency

Summary

Introduction

The EU dairy sector, including Poland, is currently facing several challenges resulting from growing global demand, the volatility of licenses, or the feed crisis caused by climatic changes. The sector’s problems are likely to exacerbate the effects of the coronavirus pandemic, which has led to further price drops and overproduction in some regions of the EU [3]. In this situation, only economically strong farms whose production is characterized by low marginal costs will survive on the market [4]. The challenge for EU agriculture is to maintain and increase agricultural income while minimizing the environmental impact of agricultural production. Its decrease leads to an increase in unit costs and a decrease in the value of production

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