PR - The Differences In Cost Efficiency Of Dairy Farms In Four Regions Of Poland

The cost efficiency of the dairy subsector has been analyzed using data for four FADN regions in Poland for the period 2004/05-2007/08. The cost inefficiency indexes have been calculated for each farm from each region. Overall, all applied measures have been statistically significant in the heteroskedasticity consistent estimation except for the farmer’s age. Regional differences have been pronounced and the benchmark Mazowsze and Podlaskie region showing higher cost efficiency than two other major regions, but not a minor, in terms of dairy production, Małopolska and Pogórze region. It is likely that the regional specialization will continue with the benchmark region gaining further advantage. A sub-regional analysis has been recommended for the future study.

Keywords: FADN data, cost frontier function, fixed effects, inefficiency, cost efficiency index