Changes of inefficiency of the principal arable crop sectors in Hungary since the EU accession

Felkai, Beáta Olga – Lámfalusi, Ibolya – Varga, Tibor

Keywords: envelope, efficiency, isocost, isoquant, production function

The paper presents the changes in efficiency of Hungarian crop production following Hungary’s accession to the European Union by comparing the efficiency scores in 2005 and 2010 of wheat, barley, maize, sunfl ower seed and rapeseed production from different size classes and organizational forms. The efficiency calculations are performed using a commonly used linear programming method, Data Envelopment Analysis (DEA). Our results indicate that there greater possibilities of improvement in allocative efficiency (83-93%) than in technical efficiency (42-68%) as the prices of agricultural products are following an extensively changing pattern. Lower improvement in efficiency can be achieved by technological and cost optimisation (10-15%) while pure technical efficiency scores indicate that management skills development can contribute to efficiency increase. Consequently the analysis of crop production efficiency according to the type of product, size and organizational form reveal a characteristic pattern for Hungarian agricultural economy when bad performing farms after improving their performance and reducing their distance from efficiency frontier are following by other farms like a rotation process.

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