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Abstract

This paper employs the concept of technology efficiency to analyse the optimal degree of specialisation of organic arable farms. Based on bookkeeping data from 461 organic farms, three technology specific frontiers (each representing a different degree of specialisation)and an all-encompassing metafrontier are estimated using a combination of Data Envelopment Analysis and Window Analysis. The results indicate that a significant proportion of sample farms have not chosen their optimal degree of specialisation. We quantify the potential productivity gain from switching to the optimal specialisation class. This is highest for moderately specialised farms switching to higher degrees of specialisation. We demonstrate that there are significant differences in the structure of inputs and outputs between farms that have chosen the optimal degree of specialisation and those that have not. We further identify the factors determining whether a farm should switch to a more specialised or a more diversified organisation of enterprises.

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