The Effects of Diversification Activities on the Technical Efficiency of Organic Farms in Switzerland, Austria, and Southern Germany
"> Figure 1
<p>Output distance function with two outputs (see Färe and Primont, 1995 [<a href="#B37-sustainability-10-01304" class="html-bibr">37</a>]).</p> "> Figure 2
<p>Returns to scale (RTS) on organic farms in (<b>a</b>) Switzerland (<b>b</b>) Austria and (<b>c</b>) Germany. Source: own calculation, number of observations in Switzerland: 639, in Austria: 732 and in Germany: 318.</p> ">
Abstract
:1. Introduction
2. Background
2.1. Literature on Economic Effects of Farm Diversification
2.2. Agricultural Policies in Germany, Austria, and Switzerland
2.3. Structure of Para-Agricultural Activities in Austria, Switzerland and Germany
3. Materials and Methods
3.1. The Distance Frontier Model
3.2. Data Description and Adjustment
4. Results
4.1. Production Structure and Efficiency
4.2. Adjustments of the Input Mix with Increasing Para-Agriculture
4.3. Determinants of Technical Efficiency
5. Discussion
6. Conclusions
Acknowledgments
Author Contributions
Note
Conflicts of Interest
Appendix A
Premium for Maintaining Organic Farming on Grassland (EUR/ha) | ||||||
Switzerland | Austria | Baden-Württemberg | Bavaria | |||
Grassland Used Twice/Year | Grassland Used Once Per Year | |||||
(<1.5 AU/ha) | (>1.5 AU/ha) | (<1.5 AU/ha) | (>1.5 AU/ha) | |||
129 | 160 | 251 | 96 | 150 | 130 | 255 |
Premium for Maintaining Organic Farming on Arable Land (EUR/ha) | ||||||
Switzerland | Austria | Baden-Württemberg | Bavaria | |||
516 | 327 | 170 | 255 |
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Switzerland | Austria | Germany | ||||
---|---|---|---|---|---|---|
Specialized 1 (n = 485) | Combined 2 (n = 154) | Specialized 1 (n = 412) | Combined 2 (n = 320) | Specialized 1 (n = 251) | Combined 2 (n = 67) | |
Share in % | ||||||
Forestry | 19.8 | 27.9 | 63.3 | 45.6 | 40.2 | 22.4 |
Agro-tourism | 0.8 | 3.2 | 14.8 | 14.7 | 0.0 | 0.0 |
Direct marketing | 8.0 | 19.5 | 7.3 | 10.9 | 39.8 | 59.7 |
Services | 1.4 | 3.9 | 4.1 | 12.2 | 0.0 | 10.4 |
Renting buildings and machinery | 67.0 | 41.6 | 9.2 | 13.1 | 15.5 | 7.5 |
Other para-agricultural activities 3 | 2.9 | 3.9 | 1.2 | 3.4 | 4.4 | 0.0 |
Sum | 100.0 | 100.0 | 100.0 | 100.0 | 100.0 | 100.0 |
Variable | Unit | 1. Switzerland (n = 639) | 2. Austria (n = 732) | 3. Germany (n = 318) | |||
---|---|---|---|---|---|---|---|
Mean | Std. Dev. | Mean | Std. Dev. | Mean | Std. Dev. | ||
(a) Variables for the production frontier | |||||||
Output from agriculture (y1) 1 | EUR | 46,060 | 24,682 | 26,084 | 17,145 | 81,412 | 40,304 |
Output from para-agriculture (y2) | EUR | 14,854 | 23,342 | 12,765 | 10,186 | 4500 | 6653 |
Variable costs (x1) | EUR | 39,245 | 15,040 | 20,172 | 9942 | 44,934 | 19,790 |
Capital (x2) | EUR | 11,978 | 5896 | 11,274 | 5088 | 19,837 | 11,242 |
Labor units per farm (x3) | AWU | 1.56 | 0.44 | 1.59 | 0.56 | 1.59 | 0.56 |
Agricultural land (x4) | ha | 19.55 | 7.20 | 21.01 | 12.57 | 46.22 | 21.68 |
(b) Determinants of technical efficiency | |||||||
Share para-agriculture (z1) | % | 0.22 | 0.20 | 0.34 | 0.20 | 0.06 | 0.10 |
Sum of environmental payments (z2) | EUR/ha | 599.0 | 436.8 | 455.4 | 147.1 | 309.4 | 81.7 |
Sum of other payments (z3) | EUR/ha | 1375.0 | 549.7 | 277.6 | 154.4 | 189.3 | 110.3 |
Land-rent per hectare (z4) | EUR/ha | 502.1 | 381.4 | 147.6 | 93.7 | 141.3 | 83.7 |
Dummy for forest-revenue (z5) | 1/0 | 0.86 | 0.34 | 0.96 | 0.19 | 0.70 | 0.46 |
Gender female (z6) | 1/0 | 0.01 | 0.09 | 0.22 | 0.41 | 0.03 | 0.17 |
Dummy for alpine grassland (z7) 2 | 1/0 | 0.11 | 0.31 | 0.41 | 0.49 | ||
Altitude of the farm location (z7a) 2 | 1/0 | 0.27 | 0.44 | ||||
Animal-units per hectare (z8) | AU/ha | 1.10 | 0.35 | 1.08 | 0.32 | 1.32 | 0.46 |
Share of grassland-farming revenue (z9) | % | 0.90 | 0.14 | 0.89 | 0.14 | 0.85 | 0.17 |
Null-Hypothesis | Test-Value | Critical Value | ||
---|---|---|---|---|
Switzerland | Austria | Germany | ||
LLR-test for joint estimation | 529.01 ** | 108.65 | ||
H1: No inefficiency † | 373.96 ** | 146.09 ** | 198.47 ** | 3.84 |
H2: CD-production function | 137.83 ** | 532.93 ** | 42.55 ** | 33.92 |
H3: Linear homogeneity (constant returns to scale) for | 1069.36 ** | 2221.47 ** | 1752.01 ** | 11.07 |
H4: No Heteroscedasticity | 392.29 ** | 253.35 ** | 251.09 ** | 26.30 |
Variable | Country Specific Frontier | Metafrontier | |||
---|---|---|---|---|---|
Switzerland | Austria | Germany | Meta 1 | Meta 2 | |
Constant | 0.2025 *** | 0.3218 *** | 0.1469 *** | 0.3935 *** | 0.5917 *** |
Output para-agriculture | 0.1116 *** | 0.2965 *** | 0.0310 *** | 0.2685 *** | 0.2002 *** |
Variable Input Costs | −0.6516 *** | −0.6552 *** | −0.4722 *** | −0.6566 *** | −0.6531 *** |
Depreciation (as Capital) | −0.1372 *** | −0.1344 *** | −0.2298 *** | −0.1328 *** | −0.0736 *** |
Labor-Units | −0.0957 | −0.0925 *** | −0.3141 *** | −0.1080 *** | −0.0634 |
Agricultural Land | −0.1782 *** | −0.0961 *** | −0.1069 *** | −0.0862 *** | −0.0878 *** |
Technical change | −0.0234 | −0.0166 | −0.0091 | −0.0092 | −0.0030 |
[…] | The estimated results for the cross-terms are left out for simplification reason |
Countries Technical Efficiency (TEG) | Meta-Technology Ratio (MTR) | Total Efficiency (TE*) | |
---|---|---|---|
Switzerland | 0.7814 | 0.6873 | 0.5383 |
Austria | 0.7598 | 0.7497 | 0.5797 |
Southern Germany | 0.8505 | 0.6487 | 0.5567 |
Switzerland | Austria | Germany | |
---|---|---|---|
Intermediate input cost share | −0.038 | −0.034 | 0.007 |
Capital cost share | 0.027 | −0.007 | 0.005 |
Labor cost share | 0.016 | −0.000 | −0.009 |
Land cost share | −0.004 | 0.041 | −0.002 |
Variable | Switzerland | Austria | Germany |
---|---|---|---|
Share para-agriculture (%) | 1.2485 *** | −1.3875 *** | 4.3546 *** |
Environmental payments (EUR/ha) | 0.4939 *** | 0.0660 | 1.0757 *** |
Other payments (EUR/ha) | 0.5147 *** | 0.2057 *** | 0.5420 *** |
Level of land-rent (EUR/ha) | −0.1244 *** | −0.1345 *** | −0.1305 |
Existing forestry activity (0/1) | −0.1110 | 0.2240 | −0.1909 |
Gender of farm manager (female = 1) | −0.6409 *** | 0.0692 | 0.7938 *** |
Dummy for alpine grassland (0/1) | 0.4217 *** | 0.0706 | |
Altitude-zone of the farm (above 600 m = 1)2 | −1.0553 *** | ||
Land-use intensity (AU/ha) | −2.6836 *** | −0.5481 *** | −0.8835 *** |
Share of revenue grassland farming (%) | 1.6496 *** | −0.5673 *** | −1.1891 *** |
For simplification, not all coefficients of the model are presented |
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Lakner, S.; Kirchweger, S.; Hoop, D.; Brümmer, B.; Kantelhardt, J. The Effects of Diversification Activities on the Technical Efficiency of Organic Farms in Switzerland, Austria, and Southern Germany. Sustainability 2018, 10, 1304. https://doi.org/10.3390/su10041304
Lakner S, Kirchweger S, Hoop D, Brümmer B, Kantelhardt J. The Effects of Diversification Activities on the Technical Efficiency of Organic Farms in Switzerland, Austria, and Southern Germany. Sustainability. 2018; 10(4):1304. https://doi.org/10.3390/su10041304
Chicago/Turabian StyleLakner, Sebastian, Stefan Kirchweger, Daniel Hoop, Bernhard Brümmer, and Jochen Kantelhardt. 2018. "The Effects of Diversification Activities on the Technical Efficiency of Organic Farms in Switzerland, Austria, and Southern Germany" Sustainability 10, no. 4: 1304. https://doi.org/10.3390/su10041304