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Abstract
This paper examines the association between agricultural subsidies and farm
efficiency using data from the European Farm Accountancy Data Network (FADN) for
operations specializing on dairy. The analysis covers the 18 year period going from 1990 to
2007 and includes eleven countries: Belgium, Denmark, France, Germany, Ireland, Italy,
Luxemburg, the Netherlands, Portugal, Spain, and the United Kingdom. Separate translog
stochastic input distance frontiers are estimated for each country. Results show high technical
efficiency averages and positive average rates of technological change. In addition, higher
subsidy dependence and larger size are significantly associated with lower technical
efficiency across all eleven countries.