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Abstract
The paper investigates the impact of subsidies and of para-agriculture on the technical
efficiency of organic farms in Switzerland, Austria and Southern Germany. The data-set
consists of bookkeeping data with 1,704 observations in the years 2003 to 2005. Technical
efficiency is modelled using a stochastic distance-frontier model combined with a
Metafrontier-model. The results show almost no efficiency differences among the farms in the
three countries. Para-agriculture shows a strong impact on farm’s efficiency and output in
Austria and Switzerland, whereas in Germany the effect is rather small. The study confirms
that agricultural subsidies have a direct impact on farm’s efficiency.