Technical efficiency of organic milk-farms in Germany - the role of subsidies and of regional factors
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This paper investigates the efficiency of organic milk farms in Germany based
on data from 1994/95 to 2005/06. Five inputs and one output are analyzed by
means of a stochastic frontier production function, allowing for heteroscedasticity
and technical effects. The selection of determinants of technical efficiency
includes 5 groups of indicators. The analysis is focused on the impacts of farm
support of organic farms and of regional factors, that can influence technical
efficiency. The results show, that the agri-environmental payments show a negative
effect on efficiency. Farms, which receive investment aid, show lower
efficiency scores. Finally, the implication for agricultural policy are discussed.