Open Access Peer-reviewed

Farm Dimension and Efficiency in Italian Agriculture: A Quantitative Approach

Nicola Galluzzo
ASGEAR Association of Geographical and Economic Studies about Rural Areas, Rieti, Italy
American Journal of Rural Development. 2013, 1(2), 26-32. DOI: 10.12691/ajrd-1-2-2
Published online: August 25, 2017

Abstract

Technical efficiency and economic efficiency are useful research tools to analyse in a quantitative approach main relationships among inputs and output used in the productive process. The aim of this paper was to investigate if there is a connection between size of some Italian farms and efficiency using the FADN dataset. The latter is a sample of farms used by the European Union to assess some impacts of the Common Agricultural Policy on a sample of farms located in different European nations. In , over the last 10 years, there has been a rise by 44.4% of the average farm surface, which has increased the usable Agricultural Surface from to 7.9. In this paper, large farms have had the best performances in terms of invested agrarian capital and land capital. Medium-small farms have however had the highest growth rates in terms of agrarian capital and also in terms of land capital. Nevertheless, large farms have been the most efficient Decision Making Units (DMUs) in absolute value of technical and economic efficiency compared to small farms, which have values of technical and economic efficiency lower than 1. Small farmers, that are fairly widespread in Italian rural areas and typical of Italian agricultural productive paradigm may improve their technical efficiency only by increasing their activities through diversification and by intensifying their agrarian and land invested capital. To sum up, small agrarian enterprises can take advantage based on technical efficiency of scale predominantly through a growth in size of surface and invested liquid asset, reducing the marginalization of agrarian territories and rural depopulation.

Keywords:

data envelopment analysis, farm size, technical efficiency, economic efficiency
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