Technical Efficiency in the Agricultural Sector-Evidence from a Conditional Quantile - Based Approach

Abstract

The tightening farm budget constraints due to the reduction of the agricultural public financing and the negative gap between the ag ricultural input and output prices should force farms to work as efficient as possible. This paper applies a fully nonparametric approach to estimate potential efficiency gains in the agricultural sector while account- ing for heterogeneity among farms. Using the ‘conditional α -quantile robust partial frontier technique’ we investigate the efficiency of agricultural enterprises specialized in cereals production. The data originate from the EU Farm Accounting Data etwork. The results indicate a considerable variability in terms of technical efficiency among farms. We find evidence that the owned to total land, the family to total labor, the irri- gation system, the region at which the farm is located and the year of observation have a statistically significant impact on productivity.