Evaluating the double effect of land fragmentation on technology choice and dairy farm productivity: A latent class model approach

Luis Orea, Jose A. Pérez and David Roibás ()

No 2013/08, Efficiency Series Papers from University of Oviedo, Department of Economics, Oviedo Efficiency Group (OEG)

Abstract: Land fragmentation affects dairy farming through its influence on foodstuff production. As such, its impact is expected to be larger on extensive farms (which use a large land area per cow) than on intensive ones. Given this, land fragmentation could also constitute an obstacle to adopt extensive production technology. As direct payments of the Common Agricultural Policy to protect the environment and preserve rural heritage concern extensive farming, land fragmentation can reduce the effectiveness of this rural development aid. We propose using a stochastic frontier latent class model approach to evaluate this double effect of land fragmentation, namely its different impact on extensive and intensive farms’ productivity and its influence on the technology choice. The model is estimated using a sample of Spanish dairy farms located in a region where land is highly fragmented. Based on the results obtained, a simulation analysis is carried out to evaluate the impact of land consolidation processes on both the technology choice and farms’ productivity.

Keywords: Milk production; latent class model; land fragmentation (search for similar items in EconPapers)
Pages: 28
Date: 2013
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Citations: View citations in EconPapers (7)

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