OPTIMAL FARM SIZE AND EFFECTIVENESS OF AGRICULTURE IN THE EU: THE CASE OF WHEAT YIELDS

Roman Skalicky; Elżbieta Rogalska; Michał Bernard Pietrzak; Marek Zinecker; Jana Meluzinova

OPTIMAL FARM SIZE AND EFFECTIVENESS OF AGRICULTURE IN THE EU: THE CASE OF WHEAT YIELDS

Abstract

The article concentrates on the relationship between the size of a farm and its efficiency in relation to wheat production in the European Union (EU). The issue is not new, however fundamental from the point of view of the agricultural policy, as the appropriate shape of the agrarian structure affects the economic rationality in agriculture and significantly improves the productivity. We analysed data for the period between 2004 to 2016 while using the Farm Accountancy Data Network. The fixed effects model was used to identify the explanatory variables for farm size and wheat yields. We calculate the yields per hectare as the ratio of the sum of input costs per hectare to the cost of producing a unit of yield per hectare. Using the 1st derivative, we then estimate the marginal cost of the inputs for each of the farm size categories. Our main conclusion is that with the growing size of a farm, there is a continuous increase in yields of wheat per hectare. This result is achieved by increasing the specific crop costs, a significant part of which are fertilizers and crop protection products, both with respect to the cultivated area and the production achieved. When evaluating the efficiency of production, the optimal size of the economic unit (according to the FADN categorization) is 5. Up to the size category 5, there is an increase in production with respect to the monetary value of production inputs. In the case of larger farms, the ratio is declining.

Authors (5)

Roman Skalicky dr
Elżbieta Rogalska dr
Michał Bernard Pietrzak (formerly: Michał Pietrzak) dr hab.
Marek Zinecker dr hab.
Jana Meluzinova dr

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Keywords

FARM EFFICIENCY, FARM SIZE, FARMING INTENSITY, PRODUCTION INPUT, PRODUCTIVITY, WHEAT YIELDS, THE EU AGRICULTURE

Details

Category:: Articles
Type:: artykuły w czasopismach
Published in:: Transformations in Business & Economics no. 20, pages 653 - 669,
ISSN: 1648-4460
Language:: English
Publication year:: 2021
Bibliographic description:: Skalicky R., Rogalska E., Pietrzak M., Zinecker M., Meluzinova J.: OPTIMAL FARM SIZE AND EFFECTIVENESS OF AGRICULTURE IN THE EU: THE CASE OF WHEAT YIELDS// Transformations in Business & Economics -Vol. 20,iss. 3c (54c) (2021), s.653-669
Verified by:: Gdańsk University of Technology