Technical efficiency of dairy farms : an empirical study of producers in Poland

Abstract

Purpose: The main objective of this article was to determine the technical efficiency of Polish dairy farms in 2008-2017, taking into account the dependence on the herd size, the milk yield of cows and the effects of scale. Design/Methodology/Approach: The non-parametric DEA method based on the concept of border efficiency was used to assess technical efficiency. The research uses models assuming constant (CCR) and variable returns to scale (BCC). The source of the data was information collected by the Farm Accountancy Data Network (FADN) in Poland. Data came from farms specializing dairying (type 45), with more than 15 cows. Findings: The results of the conducted research indicate a higher share of efficient farms using the model assuming variable returns to scale. The average efficiency ratio increased along with the increase in the size of the herd of cows and the improvement in the milk yields of cows. Practical Implications: The results of this study will be used to determine rationally the combination of inputs in dairy production. The result of these activities is an increase of efficiency and the use of economies of scale. The article clearly presents among which farm groups exists the lowest efficiency (cow herd size and milk yield). Originality/Value: The study fills a gap in approach methods to conducting research on dairy farm efficiency. On the one hand, the value of the article is built by the size of observation field, on the other – dairy farms classification by cow herd size and milk yield.