Policy impact on technical efficiency of Spanish olive farms located in Less Favored Area

Most of Spanish olive farms are concentrated in Less-Favoured Areas (LFA) with the majority of producer areas are under Objective 1 of the EU Regional Policy. The EU has long recognized such distinctive characteristics of those holdings with a specific support measures aiming to prevent the abandonment of olive groves as well as to support sustainable development of this sector. The main objective of this study is to evaluate the impact of LFA payment on the olive farms technical efficiency. Two sample farms located in LFA (63 farms receiving LFA payment support and 99 farms do not) have been observed from 2000 to 2004. A stochastic frontier production has been used. Results indicate that LFA payment, age of manager, tenure regimes of land, workforce composition and farm size affect efficiency levels. The LFA payment coefficient indicates a significant negative impact on the technical efficiency of Spanish olive farms. The farms that not receive the LFA payment has a technical efficiency rate 0.15 percentage units upper compared to those that receive this payment. Thus, the payment policy could decreases farms technical efficiency which could represents a handicap for farms economic survival and its persistence in the long term period.LFA payment, olive farm, technical efficiency, Production Economics, Productivity Analysis, Q180, D210,

Are The Spanish Citrus Farms Efficient?

Spain occupies the first position in the European and Mediterranean rankings of citrus production and trade. In our analysis we assess the technical efficiency with which this sector is operating. The main objective of this study is to analyze productivity and technical efficiency of Spanish citrus sector through citrus farms with high orange production. A stochastic frontier production model is estimated in which the technical inefficiency effects are defined by the time-varying inefficiency model. A primal approach is used to decompose Total Factor Productivity (TFP) growth into its various components. Results indicate improvement in efficiency scores of Spanish citrus farms along the period studied. Allocative efficiencies, technical efficiency change, and scale effects are found to be the main factors that increase TFP growth.Productivity Analysis,

Technical efficiency analysis and decomposition of productivity growth of Spanish olive farms

The concept of technical efficiency is critical to measuring the firm performance, determining the degree of innovative technology adoption and the overall production efficiency. Traditionally, technical efficiency has been measured as the ratio of observed output to maximum feasible output. Stochastic frontier models have been widely utilized to assess this issue. Our research evaluates technical efficiencies in the Spanish olive sector. Specifically, the main objective of this study is to estimate a stochastic frontier production model by using a farm- level panel of data. The non- negative technical efficiency effects are assumed to be a function of firm- specific variables. A sample of Spanish farms observed from 1999 to 2002 is obtained from the FADN dataset and used in the estimation of the model. Maximum- likelihood methods are applied in the estimation of the parameters of the model. A primal approach is used to decompose Total Factor Productivity (TFP) growth. Results indicate that farm location, age of manager, tenure regimes of land and whether the farm has adopted organic farming techniques affect efficiency levels . Technical efficiency change, allocative efficiencies and scale effects are found to be the main sources of TFP growth, while technical change seems to be of minor importance. Results also suggest that Spanish olive farms are less efficient relative to other EU farms. This suggests that improvements in the Spanish olive productive capacity after the accession to the EU were not fully implemented in the period of analysis. This may be due to a decline in olive farm incomes as a result of a decline in both public subsidies and in output prices after the mid 1990s.Crop Production/Industries, Productivity Analysis,

The impact of the CAP reforms on the efficiency of the COP sector in Spain

The arable crop sector (COP) occupies a prominent position within the European Union’s agricultural sector. Within Spain, the COP sector accounts for almost a third of total Agricultural Guidance and Guarantee Fund expenses, and a half of the utilised agricultural area. The COP sector is not only relevant because of its physical and economic magnitude, but also because of the political attention it receives. The Common Agricultural Policy reforms that occurred during the 1990s paid special attention to this sector. This paper aims at determining the impacts of Agenda 2000 on a sample of Spanish COP farmers’ production decisions by using an output-oriented stochastic distance function. The distance function allows assessing the reform-motivated changes on total output, input used, input composition and crop mix. It also permits to assess the impacts of the reform on farms’ technical efficiency. Results show that the reform has shifted outwards the production frontier and changed output composition in favour of voluntary set aside land. With respect to input composition, Agenda 2000 has induced a decrease in land, fertilizers and other inputs in favour of labour. In addition, Agenda 2000 had a negative impact on technical efficiency.Agenda 2000, efficiency, Spanish COP sector, Agricultural and Food Policy, Crop Production/Industries,

The impact of dynamic technical inefficiency on investment decision of Spanish olive farms

Spain occupies a first ranking position in worldwide production and exportation for olive oil and table olives. Such position is enforced by the positive evolution of investment demonstrated by an increase of approximately 5% of area dedicated to this cultivation during the last 6 years. This study analyzes Spanish olive sector investment decision taking into consideration the technical efficiency as a relevant element that could impact that decision by integrating the real option approach and a dynamic stochastic frontier model. This analysis has been applied to a 158 Spanish olive farms using FADN data set. The results show that the technical inefficiency persistence parameter is fairly low to unity, which means that small technical inefficiency is transmitted to the next time period. The olive groves investment is irreversible and characterized by uncertainty on price and discount rate. An increase of discount rate means that the farmers take the decision to postpone investment. An increase on price along with a decrease of discount rate leads to the decision to invest with no option value of waiting to invest. The results suggest that the decision of investment in Spanish olive depends also on technical inefficiency and it persistence. The increase of farms inefficiency means that the decision is to wait to invest. Consequently, the inefficient farmers take time and wait to invest, while a smaller persistence parameter leads to the decision to invest.Investment, olive sector, dynamic technical efficiency., Agricultural and Food Policy, Food Consumption/Nutrition/Food Safety,

How improving the technical efficiency of Moroccan saffron farms can contribute to sustainable agriculture in the Anti-Atlas region

The saffron sector as a sustainable farming system plays a primordial agro-ecological and socio-economic role in the Anti- Atlas region in Morocco. Under the Green Morocco Policy, the saffron area has more than tripled; however, productivity is still very low. To evaluate the efficiency of Moroccan saffron farming and its determinants, we estimated a stochastic frontier model using survey data collected in the production area. The results show that saffron farms suffer from technical inefficien- cies. More time dedicated to saffron field operations, a higher number of saffron plots and a greater distance to the urban centre increase farm efficiency, while the age of the farmer and the presence of off-farm activities decrease it. Building on our results, we argue that the new policy “Generation Green” should be focused on younger farmers as they are more likely to improve their skills and crop management techniques. To upscale the adoption of saffron as a sustainable farming system, an improvement in farmers’ market access is necessary which would facilitate farm specialisation, convert saffron to a major source of income and reduce dependence on off-farm activities. Strengthening the role of saffron cooperatives could represent an important step in this direction, but this requires improved knowledge dissemination and technology access

The behavioral mechanisms of voluntary cooperation across culturally diverse societies: Evidence from the US, the UK, Morocco, and Turkey

We examine the role of cooperative preferences, beliefs, and punishments to uncover potential cross-societal differences in voluntary cooperation. Using one-shot public goods experiments in four comparable subject pools from the US and the UK (two similar Western societies) and Morocco and Turkey (two comparable non-Western societies), we find that cooperation is lower in Morocco and Turkey than in the UK and the US. Using the ABC approach – in which cooperative attitudes and beliefs explain cooperation – we show that cooperation is mostly driven by differences in beliefs rather than cooperative preferences or peer punishment, both of which are similar across the four subject pools. Our methodology is generalizable across subject pools and highlights the central role of beliefs in explaining differences in voluntary cooperation within and across culturally, economically, and institutionally diverse societies. Because our behavioral mechanisms correctly predict actual contributions, we argue that our approach provides a suitable methodology for analyzing the determinants of voluntary cooperation of any group of interest

The Spanish Horticulture Sector: A dynamic efficiency analysis of Outdoor and Greenhouse farms

The horticulture sector plays a relevant role in Spanish agriculture and economy. Their participation in the final agricultural production reached 37% and it represents an important source of employment generating the half of the job in the entire Spanish agricultural sector (MARM, 2010). The purpose of this paper is the evaluation of dynamic technical efficiency for both outdoor and greenhouse Spanish farms specialized in horticulture production. A dynamic stochastic frontier model is developed to estimate the long run technical efficiency and it persistence for both samples. This analysis has been applied to 126 and 90 Spanish greenhouses and outdoor horticulture farms respectively using Farm Accounting Data Network. Those farms were observed during 6 years from 1999 to 2004. The static efficiency level of greenhouse farms is higher than outdoor farms by approximately 12%. The evolution of the static efficiency level during the studied period shows an increase by 15% in the greenhouse farms comparing to a decrease by 11% for outdoor horticulture farms. This difference can be explained by a best control of the use of different inputs in the case of greenhouse horticulture as well as the implantation of high technology that improves efficiency level over years. The empirical results also show a big difference of level between static and dynamic technical efficiency for both samples. These results are consistent with the high value of the technical inefficiency persistence parameter for both cases which suggests that the technical inefficiency is highly persistent and shows a strong competition in this sector

Dynamic Efficiency Analysis of Spanish Outdoor and Greenhouse Horticulture Sector

Crop Production/Industries,