Technical Efficiency of Organic and Biodynamic Farms in the Czech Republic

Abstract

The aim of this paper is to estimate based on panel data from 2005–2012 the inefficiency and efficiency of biodynamic farms and compare it to the organic. Using stochastic frontier analysis and t-test we tested whether the biodynamic farms are less efficient in using their inputs than organic farms. Another concern was the impact of subsidies on the production and technical inefficiency of the farms. The estimated average inefficiency of biodynamic was 58.09 % and of organic farms 28.60 % and we found statistically significant differences between both groups. While the direct payments’ and support from EAFRD fund increased the production of both types of farms, and other subsidies’ decreased it, all type of subsidies decrease the technical inefficiency. The research is financed from grant No. 11110/1312/3160 - “AnalyI za vybranyI ch ukazateluIS biodynamickeI ho zemeIŒdeIŒlstviI – komparace ve sveIŒtoveI m meIŒrIŒiI tku†of the IGA, FEM, CULS.