Víctor Moreira

Subsidies and Technical Efficiency in Agriculture: Evidence from European Dairy Farms

Abstract The objective of this article is to examine the association between agricultural subsidies and dairy farm technical efficiency in the European Union, and in so doing we make novel contributions to the literature. We include in the analysis nine diverse western European Union (EU) countries over an 18‐year period (1990‐2007) encompassing the various Common Agricultural Policy (CAP) reforms enacted since the inception of the EU. Further, we account for input endogeneity using an original method of moments estimator. Our results show that the effect of subsidies on technical efficiency may be positive, null, or negative, depending on the country. The analysis reveals that the introduction of decoupling with the 2003 CAP reform weakens the effect that subsidies have on technical efficiency.

Willingness to pay for carbon footprint on foods

Purpose – The aim of this paper is to elicit the willingness to pay (WTP) of Chilean consumers towards the carbon footprint of food products (fluid milk and bread), controlling for several consumers attributes. Design/methodology/approach – A contingent valuation method (double bounded dichotomous choice) was used to analyze the WTP, wherein personal interviews were applied to a sample of 774 supermarket consumers. Findings – Chilean consumers show a positive attitude towards the carbon footprint concept. Consumers are willing to pay 29 percent for fluid milk and 10 percent for bread, over their average prices. It seems that WTP for foods is negatively related to the share of the product on the monthly household expense. Research limitations/implications – Based on the results of this work, the WTP is unique for each product, and hence, any attempt to extrapolate these results must be done with caution. Further research should include a wider set of products. Practical implications – Local Chilean compan...

Technological Change and Technical Efficiency for Diary Farms in Three Countries of South America

A B S T R A C T The progressive liberalization of agricultural markets, along with the threat that imported products can pose to local producers, reveals the importance of productivity growth as a mechanism to improve competitiveness. Technical efficiency measurement is the most studied component of productivity because it can help to generate valuable information for policy formulation and farm level decisions focused on the improvement of farm performance. This study uses unbalanced panel data sets for dairy farms from Argentina, Chile and Uruguay, to estimate stochastic production frontier models. These frontiers are then used to estimate economies of size, technological change and technical efficiency. All estimations are based on the Battese and Coelli (1992) model, which is widely used in empirical productivity studies. The models for all three countries exhibit increasing returns to scale, which suggests that the dairy farms in the samples are operating at a suboptimal size. The average annual rate of technological change for Argentina was 0.9%, for Chile 2.6% and for Uruguay 6.9%, while average technical efficiency was 87.0%, 84.9% and 81.1%, respectively.

Technical efficiency for a sample of Chilean wine grape producers: A stochastic production frontier analysis

V.H. Moreira, J.L. Troncoso, and B.E. Bravo-Ureta. 2011. Technical efficiency for a sample of Chilean wine grape producers: A stochastic production frontier analysis. Cien. Inv. Agr. 38(3):321-329. Chile has become an increasingly important player in international wine markets. Concurrent with the expansion of Chilean wine output and exports, there has been an increase in production in several other “New World” countries including Argentina, Australia, New Zealand and South Africa. The overall growth in wine supplies has increased competition to capture market share, which highlights the importance of productivity gains among wine and grape producers. The purpose of this paper is to estimate and analyze the technical efficiency (TE) component of productivity for a sample of wine grape producers in Chile. The data includes 38 farms with specific input-output information for individual blocks yielding a total of 263 observations. We use a Cobb-Douglas model to estimate a stochastic production frontier (SPF) and to obtain TE scores both at the individual block and at the farm level. The results suggest that the average farm level TE is 77.2%, while the block level TE ranges from 23.4 to 95.0%. The value of the function coefficient is 1.021, which suggests nearly constant returns to size.

Medidas de eficiencia técnica para pequeños productores de leche del Sur de Chile: Un análisis con fronteras estocásticas y datos de panel desbalanceado

Este trabajo emplea fronteras de produccion estocasticas para medir la eficiencia tecnica y el cambio tecnologico en una muestra de predios de pequenos productores lecheros del Sur de Chile. Los datos consitituyen un panel altamente desbalanceado e incluyen 48 prediso con un total de 92 observaciones para los efercicios 1996/97 a 2001/02. Todos los agricultores de la muestra son miembrs del Centro de Gestion de Paillaco (GEGE-Paillaco). En el modelo seleccionado, el termino de ineficiencia tiene una distribucion seminormal, no hay efecto agroclimatico y la presencia tecnica es altamente significativa y variable en el tiempo.

Adoption of cleaner production practices by dairy farmers in southern Chile.

Rising concerns about the environmental costs of dairy production have resulted in an increasing use of farm practices that diminish negative production externalities. Yet, little empirical evidence exists regarding the factors infl uencing the adoption of pollution-reducing strategies by dairy farmers. In this study, we estimate a logit probability model to explain fi rststage adoption of capital-intensive cleaner production (CP) practices, using a sample of 100 medium and large-size dairy farms located in southern Chile. Voluntary approaches to pollution control in agriculture are relatively recent in Chile and diffusion has been slow and uneven among farmers. Only 43% of the farmers surveyed were using some CP practices at the time of the interview. The probability of adoption was found to be positively correlated with farmer’s education and age, awareness of environmental regulations, the type of milk buyer, and the use of complementary CP management practices. Conversely, farm structure variables were not signifi cant, which suggests that the adoption of CP practices could be responding to noneconomic motivations. La creciente preocupacion por los costos ambientales generados por la produccion lechera, se ha traducido en un mayor uso de practicas que disminuyan la generacion de externalidades negativas. Sin embargo, existe escasa evidencia empirica en relacion con los factores que determinan el nivel de adopcion de tales practicas en el caso de predios lecheros. En este estudio se estimo un modelo de probabilidad (logit) para explicar la adopcion de practicas de produccion limpia (PL) intensivas en capital, para una muestra de 100 explotaciones lecheras de mediano y gran tamano del sur de Chile. En Chile, los enfoques voluntarios para el control de la contaminacion en la agricultura, como es el caso de la PL, son relativamente recientes y su difusion ha sido lenta y desigual entre los agricultores. Para el caso de esta muestra, solo el 43% de los agricultores utilizaba practicas de PL en el momento de la entrevista. Los resultados indican que la probabilidad de adopcion presenta una correlacion positiva con la educacion del agricultor y la edad, el conocimiento de las normativas ambientales, el tipo de comprador de leche, y el uso de practicas complementarias de PL basadas en manejo. Por el contrario, las variables relacionadas con la estructura predial no fueron estadisticamente signifi cativas, lo que sugiere que la adopcion de practicas de PL puede responder a motivaciones no economicas.

A characterization of Chilean farmers based on their market-production orientation

R. Echeverria, V. Moreira, J. Barrena, and M. Gopinath. 2012. A characterization of Chilean farmers based on their market-production orientation. Cien. Inv. Agr. 39(2): 255-264. Chile’s open trade policy, implemented during the last few decades, has greatly transformed Chilean farmers and their production systems. As a result, farmers can be grouped into three categories based on their market-production orientation: domestic, transitional or export producers. The objective of this paper is to analyze the factors underlying the decision to produce for a particular market and compare the three groups of farmers based on data from the 2007 agricultural census. A generalized ordered logit model was used to analyze different methods of production, and non-parametric methods were used to compare the groups. Results show that some farmers change categories in sequence; farmers that produce for the domestic market can later produce for the foreign market and eventually specialize further in the production of exports. The three types of farmers differ in several aspects. Beyond the indisputable role of geographic attributes and irrigation in producing exportable species, export-oriented producers have more modern characteristics than those producing for the internal market: they are more educated, have access to various financial resources, benefit from state-funded programs, have better managerial skills and are active users of technology.

Total factor productivity change in dairy farming: Empirical evidence from southern Chile

Despite the importance of productivity growth, many studies carried out at the farm level focus primarily on the technical efficiency (TE) component of farm productivity. Therefore, the general purpose of this paper is to measure total factor productivity change and then to decompose this change into several distinct elements. The data were an unbalanced panel for the period from 2005 to 2010 containing 477 farms and 1,426 observations obtained from TODOAGRO, a farm-management center created in 1996 in the southern part of Chile. The region where the data come from accounts for 20% of the total milk processed in the country. Stochastic production frontiers along with the translog functional form were used to analyze total factor productivity change. The econometric evidence indicates that farms exhibit decreasing returns to size implying that costs of production rise as farm size increases, which suggests that the motivation for farm growth stems from the search for income rather than from lowering costs. The main results indicated that productivity gains through TE improvements are limited, with an average TE for the whole sample of 91.0%, and average technical efficiency change of 0.05% per year. By contrast, average technological progress at the sample mean was rather high at 1.90%, which suggests that additional investments in research and subsequent adoption of improved technologies would have a positive effect on productivity growth. The findings also revealed that farm size is not associated with productivity growth for the dairy farms in the sample.

Análisis económico de 11 predios productores de leche y carne en la Región de Los Ríos, Chile

espanolEste trabajo se llevo a cabo con datos contables elaborados por medio del software CONGA, disenado por investigadores del Instituto de Economia Agraria de la Universidad Austral de Chile, con fines de planificar y controlar la gestion de empresas agricolas. Se establecen las estructuras de costos e ingresos de los productores para determinar las actividades con mayor incidencia en el resultado de cada explotacion. Paralelamente, se determinaron, mediante los presupuestos tecnico-economicos, indicadores de rentabilidad, liquidez y solvencia. Las principales conclusiones obtenidas senalan que la mayor parte de los productores genera margenes totales positivos, siendo estos suficientes para cubrir los costos de estructura, cancelar impuestos e intereses de creditos recibidos. Los costos con mayor incidencia en los predios analizados estan representados por la reposicion de animales, alimentacion del ganado, salarios por mano de obra ocasional y permanente y los costos de fertilizacion y enmiendas, los que se asemejan a otros estudios realizados anteriormente. Por otra parte, los items de ingresos mas importantes estan vinculados a la comercializacion de leche, produccion y venta de vaquillas, terneros y novillos. En general los productores generan rentabilidades positivas (mas del 80% de los productores) tanto del capital total como del capital propio, existiendo variacion entre ambas debido a que algunos necesitan de capital externo para financiar sus actividades. EnglishThe accounting data used in the analysis was obtained through CONGA, software designed by researchers in the Institute of Agricultural Economy of the Austral University of Chile. The aim was to be able to plan and control the management of farming businesses. Furthermore, structures of costs and income to producers were established in order to identify the activities with most relevance in the final result of each exploitation. Parallel to this, technical and financial budgets were used to determine the principal indicators, such as profitability, liquidity, solvency and financial autonomy. The main conclusions obtained from the study indicate that the majority of these producers generate positive total profit margins, with many of them being able to cover structural costs as well as paying for the interest on loans received. The costs that had a major impact on the rural properties analyzed were animal replacement, cattle feeding, part-time and full-time labour, and the costs of fertilization and repairs, all of which appear to be similar to other studies carried out in the past. On the other hand, the main items regarding income are linked to the commercialization of milk, and the production and sale of heifers, calves and bullocks. Generally speaking, producers generate positive profit margins (over 80% of producers), both on the total capital investment and on their own capital, with variations between one and the other due to the fact that some producers require external capital to finance their activities.

Caracterización de sistemas productivos lecheros en el Sur de Chile con distintos sistemas de manejo y su relación con el recuento total bacteriano de la leche producida: un análisis multivariable

Resumen es: Este estudio determino y caracterizo tipos de sistemas productivos lecheros para obtencion de leche (SP) en el Sur de Chile, asociando las variables de m...