Changes in the Technical Efficiency of Hungarian Agricultural Farms between 2001 and 2014

Tóth, Orsolya

Keywords: agriculture, dea-method, farm structure, technical efficiency, C10, Q10, Q12, Q15

International and Hungarian agricultural economic research is increasingly focusing on the examination of technical efficiency, which simplifies analyses of the productive use of production reserves. Two methods are most often used in the empirical literature: non-parametric Data Envelopment Analysis (DEA), based on linear programming, and Stochastic Frontier Analysis (SFA). The present study aimed to investigate the technical efficiency of farms involved in agricultural activities in Hungary using the DEA method and data from the Hungarian FADN database. Technical efficiency was examined based on legal form, farm size category and type of farming between 2001 and 2014. Technical efficiency is the highest if its value is close to 1. The farms belonging to the biggest size category as well as the dairy farms fulfilled this remark. The author assumes that the value of technical efficiency increases parallel with the size of the farm. In addition, the author explains in connection to increasing efficiency, enhancing competitiveness and rising employment that in small farms to meet their (consumer) demand is the priority, by the larger farms to improve efficiency and competitiveness are the key priorities.