A Non-Parametric Analysis of Technical Efficiency in Bulgarian Farms Using the Fadn Dataset

Open access


The Bulgarian countryside has suffered a significant phenomenon of rural emigration since the early 1970s. The main consequence of rural depopulation has been a decline of investments in Bulgarian farms and in their own level of technical and economic efficiency. The aim of this research was to assess afterwards the enlargement of the European Union in 2007, the technical efficiency by a non-parametric approach such as the Data Envelopment Analysis (DEA), using some findings and variables investigated in the Farm Accountancy Data Network annual survey from 2007 till 2015. Farms have been stratified into functions of their typology of farming and their geographical localization. Research findings have pointed out that specialized farms as dairy farms and granivores ones have had the highest levels of technical efficiency compared to mixed farms and wine farms. To sum up, financial subsidies allocated by the Common Agricultural Policy have had a positive impact towards farmers, both increasing the technical efficiency and also in reducing the socio-economic marginalization of Bulgarian rural areas.

[1] Bachev, H. (2017). Sustainability level of Bulgarian farms. Bulgarian Journal of Agricultural Science, 23(1), 1–13.

[2] Bakucs, L. Z., Latruffe, L., Fertő, I. & Fogarasi, J. (2010). The impact of EU accession on farms’ technical efficiency in Hungary. Post-communist economies 22(2), 165–175. DOI: 10.1080/14631371003740639.

[3] Battese, G. E. (1992). Frontier production functions and technical efficiency: a survey of empirical applications in agricultural economics. Agricultural Economics 7, 185–208. DOI: 10.1016/0169-5150(92)90049-5.

[4] Bhagavath, V. (2009). Technical Efficiency Measurement by Data Envelopment Analysis: An Application in Transportation. Alliance Journal of Business Research. Available at www.ajbr.org/. Accessed 15 May 2017.

[5] Bielik, P. & Rajcaniova, M. (2004). Scale efficiency of agricultural enterprises in Slovakia. Agricultural Economics Czech, 50(8), 331–335.

[6] Bojnec, S. & Latruffe, L. (2008). Measures of farm business efficiency. Industrial Management & Data Systems 108(2), 258–270. DOI: 10.1108/02635570810847617.

[7] Bojnec, Š. & Latruffe, L. (2009). Determinants of technical efficiency of Slovenian farms. Post-Communist Economies 21(1), 117–124. DOI: 10.1080/14631370802663737.

[8] Bojnec, Š., Fertő, I., Jámbor, A. & Tóth, J. (2014). Determinants of technical efficiency in agriculture in new EU member states from Central and Eastern Europe. Acta Oeconomica, 64(2), 197–217. DOI: 10.1556/AOecon.64.2014.2.4.

[9] Bravo-Ureta, B. E., Solís, D., López, V. H. M., Maripani, J. F., Thiam, A. & Rivas, T. (2007). Technical efficiency in farming: a meta-regression analysis. Journal of productivity Analysis 27(1), 57–72. DOI: 10.1007/s11123-006-0025-3.

[10] Camelia, B. & Vasile, B. (2016). The economic farm size and sustainable value disparities between Romania and the EU States. Annals of the „Constantin Brâncuşi” University of Târgu Jiu, Economy Series 10(1), 50–57.

[11] Cesaro, L., Marongiu, S., Arfini, F., Donati, M. & Capelli, M. G. (2009). Methodology for Analysing Competitiveness, Efficiency, and Economy of Scale [project deliverable]. Brussel: INEA.

[12] Charnes, A. & Cooper, W. W. (1962). Programming with linear fractional functionals. Naval Research Logistics Quarterly 9(3–4), 181–186. DOI: 10.1002/nav.3800090303.

[13] Charnes, A., Cooper, W. W. & Rhodes, E. (1978). Measuring the Efficiency of Decision Making Units. European Journal of Operational Research 2(6), 429–444. DOI: 10.1016/0377-2217(78)90138-8.

[14] Chavas, J. P. & Aliber, M. (1993). An analysis of economic efficiency in agriculture: a nonparametric approach. Journal of Agricultural and Resource Economics 18(1), 1–16.

[15] Coelli, T. (1996). Recent developments in frontier modelling and efficiency measurement. Australian Journal of Agricultural Economics 39(3), 219–245. DOI: 10.1111/j.1467-8489.1995.tb00552.x.

[16] Davidova, S. & Latruffe, L. (2007). Relationships between technical efficiency and financial management for Czech Republic farms. Journal of Agricultural Economics 58(2), 269–288. DOI: 10.1111/j.1477-9552.2007.00109.x.

[17] Davidova, S. M. (1991). Bulgarian farm structure: From paralysis to reform. Food Policy 16(3), 196–205. DOI: 10.1016/0306-9192(91)90085-X.

[18] Di Falco, S., Penov, I., Aleksiev, A. & van Rensburg, T. M. (2010). Agrobiodiversity, farm profits and land fragmentation: Evidence from Bulgaria. Land use policy 27(3), 763–771. DOI: 10.1016/j.landusepol.2009.10.007.

[19] Domanska, K., Kijek, T. & Nowak, A. (2014). Agricultural total factor productivity change and its determinants in European Union countries. Bulgarian Journal Agricultural Science, 20(6), 1273–1280.

[20] Doyle, J. & Green, R. (1994). Efficiency and cross-efficiency in DEA: Derivations, meanings and uses. Journal of Operational Research Society 45(5), 567–578. DOI: 10.1057/jors.1994.84.

[21] Farrell, M. J. (1957). The measurement of productive efficiency. Journal of Royal Statistical Society 120, 253–281. DOI: 10.2307/2343100.

[22] Galluzzo, N. (2013). Farm dimension and efficiency in Italian agriculture: a quantitative approach. American Journal of Rural Development 1(2), 26–32. DOI: 10.12691/ajrd-1-2-2.

[23] Galluzzo, N. (2015a). Technical and economic efficiency analysis on Italian smallholder family farms using Farm Accountancy Data Network dataset. Studies in Agricultural Economics 117(1), 35–42. DOI: 10.7896/j.1501.

[24] Galluzzo, N. (2015b). Analysis of impact of rural development subsides on cropping specialization in Bulgaria and Romania using FADN data [unpublished paper]. Available at http://ageconsearch.umn.edu. Accessed 15 May 2017.

[25] Galluzzo, N. (2016). An analysis of the efficiency in a sample of small Italian farms part of the FADN dataset. Agricultural Economics Czech 62, 62–70. DOI: 10.17221/37/2015-AGRICECON.

[26] Garcia, P., Sonka, S. T. & Yoo, M. S. (1982). Farm Size. Tenure. and Economic Efficiency in a Sample of Illinois Grain Farms. American Journal Agricultural Economics 64, 119–123. DOI: 10.2307/1241181.

[27] Gorton, M. & Davidova, S. (2004). Farm productivity and efficiency in the CEE applicant countries: a synthesis of results. Agricultural economics, 30(1), 1–16. DOI: 10.1111/j.1574-0862.2004.tb00172.x.

[28] Guth, M. (2015). Diversity of FADN milk farms in the regions of the European Union in 2011. Roczniki Naukowe Stowarzyszenia Ekonomistów Rolnictwa i Agrobiznesu, 17(3), 119–124.

[29] Guyomard, H., Latruffe, L. & Le Mouël, C. (2006). Technical efficiency, technical progress and productivity change in French agriculture: Do subsidies and farms’ size matter? [unpublished paper]. Available at: https://www.researchgate.net/profile/Chantal_Mouel/publication/228378368_Technical_efficiency_technical_progress_and_productivity_change_in_French_agriculture_Do_subsidies_and_farms’_size_matter/links/09e41508814dc6724f000000.pdf. Accessed 15 May 2017.

[30] Hadad, Y., Friedman, L. & Hanani, M. Z. (2007). Measuring efficiency of restaurants using the data envelopment analysis methodology. Computer Modeling and New Technologies 11(4), 25–35.

[31] Kaneva, K. (2016). Efficiency and productivity of Bulgarian farms. Bulgarian Journal Agricultural Science, 22(2), 176–181.

[32] Kočišová, K. (2015). Application of the DEA on the measurement of efficiency in the EU countries. Agricultural Economics, 61(2), 51–62. DOI: 10.17221/107/2014-AGRICECON.

[33] Kopeva, D., Madjarova, S. & Nikolova, N. (2012). Efficiency of Agricultural Production Units. [Working papers]. Sofia: University of National and World Economy.

[34] Kumbhakar, S. C. (1993). Short-Run Returns to Scale. Farm-Size and Economic Efficiency. The Review of Economics and Statistics, 75(2), 336–341. DOI: 10.2307/2109441.

[35] Latruffe, L. (2010). Competitiveness, productivity and efficiency in the agricultural and agri-food sectors [Research paper]. Paris: OECD. DOI: 10.1787/5km91nkdt6d6-en.

[36] Latruffe, L. & Nauges, C. (2014). Technical efficiency and conversion to organic farming: the case of France. European Review of Agricultural Economics, 41(2), 227–253. DOI: 10.1093/erae/jbt024.

[37] Latruffe, L., Balcombe, K., Davidova, S. & Zawalinska, K. (2004). Determinants of technical efficiency of crop and livestock farms in Poland. Applied Economics 36(12), 1255–1263. DOI: 10.1080/0003684042000176793.

[38] Latruffe, L., Balcombe, K., Davidova, S. & Zawalinska, K. (2005). Technical and scale efficiency of crop and livestock farms in Poland: does specialization matter? Agricultural Economics 32(3), 281–296. DOI: 10.1111/j.1574-0862.2005.00322.x.

[39] Latruffe, L., Bravo-Ureta, B. E., Carpentier, A., Desjeux, Y. & Moreira, V. H. (2017). Subsidies and technical efficiency in agriculture: Evidence from European dairy farms. American Journal of Agricultural Economics 99(3), 783–799. DOI: 10.1093/ajae/aaw077.

[40] Latruffe, L., Fogarasi, J. & Desjeux, Y. (2012). Efficiency, productivity and technology comparison for farms in Central and Western Europe: The case of field crop and dairy farming in Hungary and France. Economic Systems 36(2), 264–278. DOI: 10.1016/j.ecosys.2011.07.002.

[41] Laurinavičius, E. & Rimkuvienė, D. (2017). The Comparative Efficiency Analysis of EU Members Agriculture Sectors. Rural Sustainability Research, 37(332), 10–19. DOI: 10.1515/plua-2017-0002.

[42] Manos, B., Bournaris, T., Chatzinikolaou, P., Berbel, J. & Nikolov, D. (2013). Effects of CAP policy on farm household behaviour and social sustainability. Land Use Policy 31, 166–181. DOI: 10.1016/j.landusepol.2011.12.012.

[43] Marongiu, S., Cesaro, L., Latruffe, L. & Desjeux, Y. (2010). L’Efficienza tecnica delle aziende agricole di montagna: analisi dei dati RICA e confronto fra montagna Italiana e Francese. [Unpublished paper]. Available at: https://aisre.it/images/old_papers/Marongiu.pdf. Accessed 15 May 2017.

[44] Mathijs, E. & Swinnen, J. F. (2001). Production organization and efficiency during transition: An empirical analysis of East German agriculture. The Review of Economics and Statistics 83(1), 100–107. DOI: 10.1162/003465301750160072.

[45] Mathijs, E. & Vranken, L. (2001). Human capital, gender and organisation in transition agriculture: measuring and explaining the technical efficiency of Bulgarian and Hungarian farms. Post-Communist Economies 13(2), 171–187. DOI: 10.1080/14631370120052654.

[46] Mathijs, E., Blaas, G. & Doucha, T. (1999). Organisational form and technical efficiency of Czech and Slovak farms. MOST: Economic Policy in Transitional Economies, 9(3), 331–344. DOI: 10.1023/A:1009524807421.

[47] Nowak, A., Kijek, T. & Domanska, K. (2015). Technical efficiency and its determinants in the European Union agriculture. Agricultural Economics–Czech, 61(6), 275–283. DOI: 10.17221/200/2014-AGRICECON.

[48] Papadas, C. T., Dahl, D. C. (1991). Technical efficiency and farm size: a non-parametric frontier analysis [Working paper]. Minneapolis: University of Minnesota.

[49] Paul, C., Nehring, R., Banker, D. & Somwaru, A. (2004). Scale economies and efficiency in US agriculture: are traditional farms history? Journal of Productivity Analysis, 22(3), 185–205.

[50] Turčeková, N., Svetlanská, T., Kollár, B. & Záhorský, T. (2015). Agri-environmental performance of EU member states. Agris On-line Papers in Economics and Informatics, 7(4), 199–208.

[51] Vēveris, A., Leimane, I. & Krieviņa, A. (2007). Efficiency analysis of agricultural sector in Latvia compared to other EU countries, based on FADN data. In Ivans, U., ed., Economic Science for Rural Development (pp. 13–19). Jelgava: Latvian Academy of Agriculture and Forestry Sciences.

[52] Záhorský, T. & Pokrivčák, J. (2016). Determinants of efficiency in agriculture in CEE countries [Unpublished paper]. DOI: 10.15414/isd2016.s12.11.

[53] European Commission Agriculture and Rural Development (2014). Concept of FADN. Available at www.ec.europa.eu/agriculture/rica/concept_en.cfm. Accessed 15 May 2017.

European Countryside

The Journal of Mendel University in Brno

Journal Information

CiteScore 2017: 0.78

SCImago Journal Rank (SJR) 2017: 0.265
Source Normalized Impact per Paper (SNIP) 2017: 0.607


All Time Past Year Past 30 Days
Abstract Views 0 0 0
Full Text Views 138 138 48
PDF Downloads 62 62 32