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Leidiniai
2012-12-31

Patterns of Efficiency and Productivity in the Lithuanian Agriculture: A Non-parametric Analysis: Scientific study

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It is efficiency that provides a momentum for a non–inflatory economic development and increase in competitiveness. Indeed, firm– and sector–specific efficiencies do also influence national competitiveness. This study aims at discussing efficiency and total factor productivity patterns in the Lithuanian agricultural sector as well as their implications on policy making. The efficiency analysis is carried out at various levels: First, the agricultural sector is compared to the remaining economic sectors of the Lithuanian economy. Second, the performance of the Lithuanian family farms is compared to that of the EU Member States. Third, the farming efficiency is analysed across farming types in Lithuania. The analysis, therefore, covers both national and international levels. The study is organized in the following way: Section 1 describes the general idea of the research and contains the literature survey. Section 2 presents the research methods, namely DEA, Malmquist TFP index, and MULTIMOORA. Section 3 focuses on the Lithuanian agricultural sector and treats the data provided by Statistics Lithuania. The Lithuanian agricultural sector is analysed by the means of index decomposition analysis and financial ratio analysis. The inter–sectoral comparison proceeds by employing Malmquist TFP index for analysis of the productive efficiency. Section 4 is solely devoted to family farm sector and relies on FADN data. Specifically, an international comparison of family farming is facilitated by the means of DEA, whereas the Lithuanian family farm performance is analysed by both DEA and Malmquist TFP index. The managerial implications of the findings on the agricultural policy are discussed.

 

The DEA enabled to identify the prospective ways for efficiency improvement. More specifically, land productivity should be increased in the Baltic States. Moreover, the increased crop output would enable to achieve the efficiency frontier. The future challenges for the agricultural development of the Baltic States are discussed in the study. The analysis showed that efficiency of an average Lithuanian farm had been somehow subdued during 2005–2007. Mixed crop and mixed livestock (mainly grazing) farming was peculiar with the highest technical efficiency estimate throughout the research period. Slack analysis revealed that low land productivity, returns on assets, and intermediate consumption productivity are the most important sources of the inefficiency.

 

Keywords: family farms, efficiency, total factor productivity, data envelopment analysis.

 

Patterns of Efficiency and Productivity in the Lithuanian Agriculture: A Non-parametric Analysis: Scientific Study / Tomas Baležentis, Irena Kriščiukaitienė. – Vilnius: Lithuanian Institute of Agrarian Economics, 2012. – 61 p.  (Online) ISBN 978-9955-481-35-5.

 

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