Does multi-functionality affect technical efficiency? A non-parametric analysis of the Scottish dairy industry.
Recent policy changes within the Common Agricultural Policy have led to a shift from a solely production-led agriculture towards the promotion of multi-functionality. Conversely, the removal of production-led supports would indicate that an increased concentration on production efficiencies would seem a critical strategy for a country's future competitiveness. This paper explores the relationship between the 'multi-functional' farming attitude desired by policy makers and its effect on technical efficiency within Scottish dairy farming. Technical efficiency scores are calculated by applying the non-parametric data envelopment analysis technique and then measured against causes of inefficiency. Amongst these explanatory factors is a constructed score of multi-functionality. This research finds that, amongst other factors, a multi-functional attitude has a significant positive effect on technical efficiency. Consequently, this seems to validate the promotion of a multi-functional approach to farming currently being championed by policy-makers.
Policy and Strategy Group, Department of Land Economy, Research Division, SAC, Edinburgh, Scotland, UK. Andrew.Barnes@sac.ac.uk
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D003611:Dairy Products / Q000706:statistics & numerical data; D019649:Food Industry / Q000379:methods* / Q000706:statistics & numerical data*; D012606:Scotland; D018709:Statistics, Nonparametric