The impact of efficiency on the profitability of large farms in the Visegrad Four

Abstract

The issue of productivity and performance in agriculture is significant because it affects a country's competitiveness, sustainability, and self-sufficiency in agricultural production and is reflected in European policy. This study aims to determine which country had the most efficient large farms compared to other V4 countries and whether efficiency in each country translates into the performance of large farms. The data were obtained from the EU FADN (Farm Accountancy Data Network) database from 2005 to 2019. These data were then evaluated using the statistical methods DEA: CCR-O (Data Envelopment Analysis: constant returns to scale), DEA: BCC-O (Data Envelopment Analysis: variable returns to scale), and Pearson correlation coefficient. Regarding international comparisons in achieving efficiency as measured by DEA, Hungary is the best performer among the countries compared, followed by Czechia, Poland, and Slovakia. The correlation between efficiency and performance measured by Farm Net Value Added was demonstrated only for Hungary. The international comparison provided information about which country had the most efficient large farms, what the ranking of countries was in terms of efficiency, and for which countries efficiency had / did not have a potential impact on performance. At the same time, the relationships regarding the efficiency and performance of farms with an economic size above EUR 500 000 of standard output were clarified.The issue of productivity and performance in agriculture is significant because it affects a country's competitiveness, sustainability, and self-sufficiency in agricultural production and is reflected in European policy. This study aims to determine which country had the most efficient large farms compared to other V4 countries and whether efficiency in each country translates into the performance of large farms. The data were obtained from the EU FADN (Farm Accountancy Data Network) database from 2005 to 2019. These data were then evaluated using the statistical methods DEA: CCR-O (Data Envelopment Analysis: constant returns to scale), DEA: BCC-O (Data Envelopment Analysis: variable returns to scale), and Pearson correlation coefficient. Regarding international comparisons in achieving efficiency as measured by DEA, Hungary is the best performer among the countries compared, followed by Czechia, Poland, and Slovakia. The correlation between efficiency and performance measured by Farm Net Value Added was demonstrated only for Hungary. The international comparison provided information about which country had the most efficient large farms, what the ranking of countries was in terms of efficiency, and for which countries efficiency had / did not have a potential impact on performance. At the same time, the relationships regarding the efficiency and performance of farms with an economic size above EUR 500 000 of standard output were clarified.