Technical, scale, allocative and economic efficiencies in the Slovenian farms

JEL: Q12, C14CD ROMThis paper analyzes technical, scale, allocative and economic efficiency for Slovenian farms during the transition period 1994-2003, with a Farm Accountancy Data Network (FADN) sample. Such studies of various components of economic efficiency are rare in transitional agriculture, especially in Slovenia. The research contributes crucial issue of whether small family farms might be able to compete on international markets, as Slovenian agriculture is characterized by such structures.Data Envelopment Analysis (DEA) models are used with an output-orientation, three outputs and four inputs. This non-parametric approach is compared with applied parametric stochastic frontier approach and cluster analysis is used to identify three different farm groups. The data used in the empirical analysis are the data averages for 13 farm production branches from the FADN sample of Slovenia.The average technical, scale, allocative and economic efficiencies for the whole FADN sample over the whole analyzed period are relatively high (around or over 0.90), suggesting that, although the FADN sample contains very different farm production types, farms have similar management practices, and are similarly able to make the best use of the existing technology. Five farm branches (crop, dairy, livestock using own feed, fruit, and forestry farms) are fully efficient with respect to all calculated efficiencies (technical, scale, allocative, and economic), suggesting these specializations have the best chance to compete on the European and world markets