Are European Farms Equally Efficient? What Do Regional FADN Data on Crop Farms Tell Us?

Abstract

The study analyzes productive efficiency of crop farming in the EU. We use publicly available data on crop farming from FADN database. Standard efficiency measurement techniques based on frontier analysis indicate that the representative farms provided in the database are fully efficient, even though there is ample evidence in the literature that this is highly unlikely. We find that this is a consequence of overly restrictive assumptions about the compound error in standard SF models. The efficiency benchmark, based on the best model given data with generalized error specification, reveals substantial differences in crop farming efficiency in the EU.