Hostname: page-component-cd9895bd7-7cvxr Total loading time: 0 Render date: 2024-12-23T09:35:53.341Z Has data issue: false hasContentIssue false
  • English
  • Français

The Impact of Parcel Structure on the Efficiency of Finnish Dairy Farms

Published online by Cambridge University Press:  15 September 2016

Olli Niskanen  and
Anna-Maija Heikkilä
Olli Niskanen*
Affiliation:
Department of Economics and Society at the Natural Resources Institute Finland
Anna-Maija Heikkilä
Affiliation:
Department of Economics and Society at the Natural Resources Institute Finland
*
Correspondence: Natural Resources Institute Finland ▪ Latokartanonkaari 9, FI-00790 Helsinki ▪ Phone +358.29.532.6000 ▪ Email [email protected].
Get access Rights & Permissions [Opens in a new window]

Abstract

In Finland, expanding dairy farms often face the problem of additional fields being geographically distant and only available as small parcels. We develop a stochastic production frontier model to estimate the technical efficiency of Finnish dairy farms and simulate the effect of parcel distance and parcel size on the efficiency of an average farm for 2000 through 2009. The overall development of technical efficiency is positive during the study period but increases in distance and decreases in parcel size both significantly reduce farm efficiency. Therefore, efforts to improve the parcel structure are justified.

Keywords

milk productionparcel structurestochastic frontiertechnical efficiency
Type
Research Article
Information
Agricultural and Resource Economics Review , Volume 44 , Issue 1 , April 2015 , pp. 65 - 77
Copyright
Copyright © 2015 Northeastern Agricultural and Resource Economics Association 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Aigner, D., Lovell, C.A.K., and Schmidt, P. 1977. “Formulation and Estimation of Stochastic Frontier Production Function Models.” Journal of Econometrics 6(1): 21–37.CrossRefGoogle Scholar
Alvarez, A., Del Corral, J., and Tauer, L.W. 2012. “Modeling Unobserved Heterogeneity in New York Dairy Farms: One-stage versus Two-stage Models.” Agricultural and Resource Economics Review 41(3): 275–285.CrossRefGoogle Scholar
Baltagi, B.H., and Griffin, J.M. 1988. “A General Index of Technical Change.” Journal of Political Economy 96(1): 20–41.CrossRefGoogle Scholar
Battese, G.E., and Coelli, T.J. 1992. “Frontier Production Functions, Technical Efficiency, and Panel Data with Application to Paddy Farmers in India.” Journal of Productivity Analysis 3(1): 153–169.CrossRefGoogle Scholar
Battese, G.E., and Coelli, T.J. 1995. “A Model for Technical Inefficiency Effects in a Stochastic Frontier Production Function for Panel Data.” Empirical Economics 20(2): 325–332.CrossRefGoogle Scholar
Buller, O.H., and Bruning, G. 1979. “Management Effects of Spatially Dispersed Land Tracts: A Simulation Analysis.” Western Journal of Agricultural Economics 4(1): 129–142.Google Scholar
Byma, J.P., and Tauer, L.W. 2010. “Exploring the Role of Managerial Ability in Influencing Dairy Farm Efficiency.” Agricultural and Resource Economics Review 39(3): 505–516.CrossRefGoogle Scholar
Cabrera, V.E., Solis, D., and Del Corral, J. 2010. “Determinants of Technical Efficiency among Dairy Farms in Wisconsin.” Journal of Dairy Science 93(1): 387–393.CrossRefGoogle ScholarPubMed
Chambers, R.G. 1988. Applied Production Analysis: A Dual Approach. New York, NY: Cambridge University Press.Google Scholar
Del Corral, J., Perez, J.A., and Roibas, D. 2011. “The Impact of Land Fragmentation on Milk Production.” Journal of Dairy Science 94(1): 517–525.CrossRefGoogle ScholarPubMed
Di Falco, S., Penov, I., Aleksiev, A., and Van Rensburg, T. 2010. “Agrobiodiversity, Farm Profits, and Land Fragmentation: Evidence from Bulgaria.” Land Use Policy 27(3): 763–777.CrossRefGoogle Scholar
Environmental Administration of Finland. 2000. “Environmental Protection Decree 169/2000.” Available at www.finlex.fi/en/laki/kaannokset/2000/en20000169.pdf (accessed August 28, 2013).Google Scholar
Finnish Ministry of the Environment. 2010. “Kotieläintalouden Ympäristönsuojeluohje (Guidelines for Environmental Protection in Animal Husbandry).” Available at www.ymparisto.fi/download.asp?contentid=117243&lan=fi (accessed August 28, 2013) (in Finnish).Google Scholar
Greene, W. 2011. Econometric Analysis (7th edition). Upper Saddle River, NJ: Prentice-Hall. Google Scholar
Guan, Z., Kumbhakar, S.C., Myers, R.J., and Oude Lansink, A. 2009. “Measuring Excess Capital Capacity in Agricultural Production.” American Journal of Agricultural Economics 91(3): 765–776.CrossRefGoogle Scholar
Hiironen, J. 2012. “On the Impacts and Profitability of Farmland Consolidation.” Dissertation, Aalto University publication series 21/2012, Aalto University, Helsinki.Google Scholar
Kumbhakar, S., and Lovell, K. 2000. Stochastic Frontier Analysis. Cambridge, UK: Cambridge University Press.CrossRefGoogle Scholar
Kutlu, L. 2010. “Battese-Coelli Estimator with Endogenous Regressors.” Economics Letters 109(2): 79–81.CrossRefGoogle Scholar
Manjunatha, A., Anik, A.R., Speelman, S., and Nuppenau, E. 2013. “Impact of Land Fragmentation, Farm Size, Land Ownership, and Crop Diversity on Profit and Efficiency of Irrigated Farms in India.” Land Use Policy 31(1): 397–405.CrossRefGoogle Scholar
Marschak, J., and Andrews, W. 1944. “Random Simultaneous Equations and the Theory of Production.” Econometrica 12(3/4): 143–205.CrossRefGoogle Scholar
Meester, G. 2011. “European Integration and Its Relevance for Agriculture, Food, and Rural Areas.” In Oskam, A., Meester, G., and Silvis, H., eds., EU Policy for Agriculture, Food, and Rural Areas. Wageningen, The Netherlands: Wageningen Academic Publishers.Google Scholar
MTT/Luke Natural Resources Institute. 2014. “Economydoctor: Forecast of Structural Development.” Available at www.mtt.fi/economydoctor (accessed March 26, 2014).Google Scholar
Mutter, R., Greene, W., Spector, W., Rosko, M., and Mukamel, D. 2013. “Investigating the Impact of Endogeneity on Inefficiency Estimates in the Application of Stochastic Frontier Analysis to Nursing Homes.” Journal of Productivity Analysis 39(2): 101–110.CrossRefGoogle Scholar
Myyrä, S. 2009. “Productivity Development in Agriculture.” In Niemi, J. and Ahlsted, J., eds., Finnish Agriculture and Rural Industries 2009. Publication 109a, Agrifood Research Finland, Economic Research, Helsinki.Google Scholar
Myyrä, S., and Pietola, K. 2002. “Economic Importance of Parcel Structure on Finnish Farms.” Agricultural and Food Science in Finland 11(3): 163–173.CrossRefGoogle Scholar
Myyrä, S., and Pitkänen, T. 2008. “Farmer and Landowner Choices over Drainage Systems: Profit Maximization and the Environment.” Proceedings of the Tenth International Drainage Workshop of ICID Working Group on Drainage. Helsinki University of Technology, Water Resources Publications 16: 68–77.Google Scholar
Myyrä, S., Pouta, E., and Hänninen, H. 2008. “Suomalainen Pellonomistaja (Finnish Farm Owners).” Publication 115, MTT Agrifood Research Finland (in Finnish with an English abstract).CrossRefGoogle Scholar
Niroula, G., and Thapa, G. 2007. “Impacts of Land Fragmentation on Input Use, Crop Yield, and Production Efficiency in the Mountains of Nepal.” Land Degradation and Development 18(3): 237–248.CrossRefGoogle Scholar
Ollikainen, M., and Ollikainen, M. 2004. “The Finnish Coordinate Reference Systems.” Finnish Geodetic Institute and the National Land Survey. Available at www.maanmittauslaitos.fi/sites/default/files/Finnish_Coordinate_Systems.pdf (accessed August 28, 2013).Google Scholar
Oude Lansink, A., Pietola, K., and Bäckman, S. 2002. “Efficiency and Productivity of Conventional and Organic Farms in Finland 1994–1997.” European Review of Agricultural Economics 29(1): 51–65.CrossRefGoogle Scholar
Patton, M., Kostov, P., McErlean, S., and Moss, J. 2008. “Assessing the Influence of Direct Payments on the Rental Value of Agricultural Land.” Food Policy 33(5): 397–405.CrossRefGoogle Scholar
Pyykkönen, P. 2006. “Factors Affecting Farmland Prices in Finland.” Dissertation, Pellervo Economic Research Institute publication 19, University of Helsinki.Google Scholar
Rahman, S., and Rahman, M. 2008. “Impact of Land Fragmentation and Resource Ownership on Productivity and Efficiency: The Case of Rice Producers in Bangladesh.” Land Use Policy 26(1): 95–103.CrossRefGoogle Scholar
Sipiläinen, T. 2007. “Sources of Productivity Growth on Finnish Dairy Farms: Application of an Input Distance Function.” Food Economics, Acta Agriculturae Scandinavica, section C 4(2): 65–76.CrossRefGoogle Scholar
Sipiläinen, T, and Ryhänen, M. 2005. “Technical Change in Finnish Grass Silage Production.” Agricultural and Food Science 14(3): 250–263.CrossRefGoogle Scholar
Statistics Finland. 2013a. “Consumer Price Index.” Helsinki, Finland. Available at www.stat.fi/til/khi/index_en.html (accessed August 28, 2013).Google Scholar
Statistics Finland. 2013b. “Index of Producer Prices of Agricultural Products.” Helsinki, Finland. Available at www.stat.fi/til/mthi/index_en.html (accessed August 28, 2013).Google Scholar
Suomela, S. 1950. “Peltojen Sijainnin Vaikutus Maatilan Talouteen (On the Influence of the Location of Fields on Farming).” Publications of the Scientific Agricultural Society of Finland, 71.Google Scholar
Tan, S., Heerink, N., Kuyvenhoven, A., and Qu, F. 2010. “Impact of Land Fragmentation on Rice Producers’ Technical Efficiency in Southeast China.” NJAS Wageningen Journal of Life Sciences 57(2): 117–123.CrossRefGoogle Scholar
Tike. 2013. “Producer Prices of Agricultural Products.” Information Center, Ministry of Agriculture and Forestry, Helsinki, Finland. Available at www.maataloustilastot.fi/en/producer-prices-of-agricultural-products (accessed August 28, 2013).Google Scholar
Tran, K.C., and Tsionas, E.G. 2013. “GMM Estimation of Stochastic Frontier Model with Endogenous Regressors.” Economics Letters 118(1): 233–236.CrossRefGoogle Scholar
Wu, Z., Liu, M., and Davis, J. 2005. “Land Consolidation and Productivity in Chinese Household Crop Production.” China Economic Review 16(1): 28–49.CrossRefGoogle Scholar