Gordana Manevska-Tasevska

Product Assortment and the Efficiency of Farms

During the past decade, interventions for the restructuring and modernising of viticulture have been of great interest to the winemaking Western Balkan Countries (WBCs) and Early Transition Countries (ETCs) (Food and Agricultural Organization 2009). Within the platform for rural development and support from the national Rural Development Programs (RDP), grape producers have been encouraged to uproot old vineyards consisting of regional/local grape varieties and replace them with recognised European grape varieties. Growing demand for rootstocks of European grape varieties in all WBCs and ETCs has been reported by the FAO (Food and Agricultural Organization 2009). Macedonia,1 which is used as a case study in this chapter, is an EU aspirant country, and adjustments to match EU regulations and practices, including wine regulations, are considered to be the key to improving the competitiveness and environmental sustainability of the Macedonian wine sector. However, adjustments in the grape assortment in Macedonia may not necessarily be economically sustainable (Bozinovski, personal communication 2011).2 Moreover, it has not been proven to be appropriate for achieving higher farm efficiency, which is a key objective of the ongoing RDPs.

Evaluating the potential effectiveness of rural development programme targets on farms in FYR Macedonia – An efficiency study of grape-growing family farms

Abstract The validity of the rural development programme (RDP) targets chosen by government for farms in Former Yugoslav Republic (FYR) of Macedonia was examined by evaluating the influence of these targets on the farm efficiency. The method comprises two steps, with data envelopment analysis (DEA) applied to calculate farm efficiency in the first step and a Tobit regression analysis to examine the influence of RDP targets on efficiency in the second step. Farm-level data from a 2006–2008 survey were used to examine RDP measures targeted at stable yield, yield improvement and modernisation of equipment. The results indicate huge potential for efficiency improvement. More efficient farms used a smaller area, irrigated a smaller proportion of their total area, used less hired labour and used and paid less for inputs, but produced a larger quantity, with higher value per hectare. It was shown that not all the RDP targets implemented to improve efficiency were justified.

Pure and compensated efficiency of Swedish dairy farms

The compensatory effect of environmental subsidies for agri-environmental output constraints was evaluated through a comparative analysis observing the ‘ pure ’ efficiency, as a benchmark for prevailing production conditions, and the ‘ compensated ’ efficiency, as a proxy indicator of the compensation. An unbalanced data panel covering 3578 Swedish dairy farms in the period 2002-2012 was used. The analysis showed that in the study period, environmental farm support decreased the differences in farm revenue generated by agri-environmental output constraints in Sweden. However, the environmental support distribution did not succeed in meeting regional needs, so difficulties in farmers’ ability to generate output in southern and central forest and valley areas of Sweden were visible. Furthermore, the environmental agricultural support had only a partial subsidisation effect on ‘green’ farm management practices, with full compensation being achieved for organic and capital-extensive farming, whereas low livestock density farming was not sufficiently compensated. This analysis reveals incentives with policy implications for farm economic performance and provides direct input to future policy recommendations for environmental support allocation.