Abstract
The aim of the article is to evaluate production efficiency and its determinants of specialised dairy farming among the EU regions. In the most of European regions, there is a relatively high significance of small specialised farms including dairy farms. The DEAVRS method (data envelopment analysis with variable returns to scale) reveals efficient and inefficient regions including the scale efficiency. In the next step, the two-sample t-test determines differences of economic and structural indicators between efficient and inefficient regions. The research reveals that substitution of labour by capital/contract work explains the variability of the farm net value added per AWU (annual work unit) income indicator by more than 30%. The significant economic determinants of production efficiency in specialised dairy farming are farm size, herd size, crop output per hectare, productivity of energy, and capital (at α = 0.01). Specialised dairy farms in efficient regions have significantly higher farm net value added per AWU than inefficient regions. Agricultural enterprises in inefficient regions have a more extensive structure and produce more noncommodity output (public goods). Specialised dairy farms in efficient regions have a slightly higher milk yield, specific livestock costs of feed, bedding, and veterinary services per livestock unit.
Highlights
Specialised dairy farms represent an important type of farming, but their importance varies within the EU
While the coverage of the sector is very high in most EU-15 member states, it is generally lower in other member states
Before 1990, the majority of milk production in Czechoslovakia came from large agricultural companies, either state farms or agricultural cooperatives
Summary
Specialised dairy farms represent an important type of farming, but their importance varies within the EU. The share of milk production in specialised dairy farms within the total milk production in the EU ranges from 24% (Czech Republic) to 99.9% (some regions in Spain and Portugal). The rest of the milk production comes from mixed crop and livestock farms. They have to reach better yields and quality because they are unable to spread the price risk into various crops or commodities. Production efficiency is one of the key prerequisites for the competitiveness of enterprises in every business. The question about production efficiency of specialised dairy farms arises due to the expected abolition of the milk quota system in 2015
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