Abstract
Growing environmental concerns have prompted governments to make sustainable choices in agricultural resource use. Evaluating the sustainability of agricultural systems is a key issue for the implementation of policies and practices aimed at revealing sustainability. This study aimed to evaluate the performance of Norwegian dairy farms, accounting for marginal effects of environmental (exogenous) variables. We adopted the dynamic parametric approach within the input distance function framework to estimate the performance of Norwegian dairy farms, focusing on the technical efficiency and determinates. For comparison, we also estimated the static parametric model, which was used by previous studies. We used unbalanced farm-level panel data for the period 2000–2018. The result shows a mean technical efficiency score of 0.92 for the dynamic model and 0.87 for the static models. The empirical result shows that the previous studies that focused on the static model reported a biased result on the performance of dairy farms. The dynamic efficiency score suggests that Norwegian dairy farms can reduce the input requirement of producing the average output by 8% if the operation becomes technically efficient. The environmental variables have a different effect on the performance of the farmers; thus, policymakers need to place special focus on these variables for the sustainable development of the dairy sector.
Highlights
Food insecurity, climate change, and biodiversity resource loss are the main challenges to the sustainable development of mankind [1]
The purpose of this study is to evaluate the role of technical efficiency, accounting for the environmental variables that achieve the sustainable development of Norwegian dairy farms, using a dynamic stochastic approach
This study focused on measuring the performance of dairy farms in Norway from the dynamic and the static perspective
Summary
Climate change, and biodiversity resource loss are the main challenges to the sustainable development of mankind [1]. Long-term food security; (2) agriculture in all parts of the country; and (3) creating more added value along with sustainable production with reduced greenhouse gas emissions. Growing environmental concerns have prompted governments to make sustainable choices and perform sustainable actions in the economy, aimed at preventing the deterioration of the environment whilst maintaining long-term food security and optimal utilization of production resources [2]. Measuring and evaluating farm performance accounting for environmental differences is an important task for researchers in order to make the best use of resources and to identify the best-performing farms [4]. Evaluating the sustainability of agricultural systems is a key issue for the implementation of policies and practices aimed at Sustainability 2021, 13, 1841.
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