Agric. Econ. - Czech, 2022, 68(1):1-10 | DOI: 10.17221/384/2021-AGRICECON

Productivity and efficiency in Czech agriculture: Does farm size matter?Original Paper

Lukáš Čechura*,1, Zdeňka Žáková Kroupová ORCID...1, Michaela Lekešová2
1 Department of Economics, Faculty of Economics and Management, Czech University of Life Sciences Prague, Prague, Czech Republic
2 Institute of Agricultural Economics and Information, Prague, Czech Republic

This paper deals with the sources of total factor productivity (TFP), namely technical efficiency, scale efficiency, and technological change, considering the size of agricultural producers and using balanced panel data in the period 2014-2018 drawn from the Farm Accountancy Data Network (FADN) database for three sectors of Czech agriculture - cereals, milk, and beef. The investigation is based on the stochastic frontier (SF) modelling of an input distance function (IDF) with four error components (heterogeneity, statistical noise, persistent and transient inefficiency). The sector-specific models are estimated by a four-step estimating procedure with a system generalised method of moments (GMM) estimator to address the endogeneity problem. The results reveal inter- and intra-sectoral differences in productivity drivers. In particular, the smallest producers lag considerably behind the largest ones due to the scale effect (SEC). While large farms should focus on technological change, improvements in scale and technical efficiency have been identified as the main sources of coping with productivity losses for small farmers.

Keywords: Czech Republic; input-distance function; stochastic frontier analysis; technical efficiency; total factor productivity

Published: January 25, 2022  Show citation

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Čechura L, Žáková Kroupová Z, Lekešová M. Productivity and efficiency in Czech agriculture: Does farm size matter? Agric. Econ. - Czech. 2022;68(1):1-10. doi: 10.17221/384/2021-AGRICECON.
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