An econometric analysis of the economic and environmental efficiency of dairy farms in the KwaZulu-Natal Midlands

[摘要] ENGLISH ABSTRACT: This dissertation is an analysis of dairy production in the Midlands district of KwaZulu-Natal.The analysis of agricultural production generally ignores undesirable outputs that areproduced alongside desirable outputs. This research attempted to integrate a model of nitrateleaching from dairy production into a multiple input/output representation of the productiontechnology, together with the analysis of technical efficiency. Estimation of both technicalefficiency and environmental efficiency were done following the parametric econometricstochastic frontier (SFA) and the nonparametric mathematical programming dataenvelopment analysis (DEA) approaches.The study used unbalanced panel data from 37 individual highly specialized dairy farms forthe period 2000 to 2007 and totals to 2130 observations. Production functions for the threeoutputs; milk, animals and farm produced feed, were fitted as a simultaneous system to modelthe farms' production activities for the econometric SFA estimation of technical efficiency. Asingle equation reduced form was fitted as a frontier to allow for the estimation of the relativeefficiencies of the individual farms. The results showed that with data this detailed it waspossible to refine the model until it fits very tightly. Indeed, in the gross output model thatincludes cows, there was nothing left to call inefficiency and what was clearly a frontierbecomes a mean response function. Technical efficiency was further calculated using thenonparametric DEA approach using the same dataset.The estimation of environmental efficiency was done using both SFA and DEA approaches.Undesirable emissions of nitrate were represented within the models by calculating nitrogensurplus (kg/ha) for each farm. This nitrogen surplus value was based on the intensity of theuse of nitrogen containing inputs and the nitrogen content of marketable products specificinformation and from farm data which were used to calculate a farm nitrogen balance. Thestochastic estimation of environmental efficiency used the same data that were used for theestimation of technical efficiency. However, for the DEA calculation of environmentalefficiency, a balanced cross-section dataset for 34 farms participating in a pasture-utilizationprogramme was used. This dataset was used because it had quantities of nitrogen fertilizerand other nitrogen containing inputs.Results indicate that there was minimal 'over-usage (over production) of milk thus reducingmilk output alone will not lead to improved environmental efficiency. Farm size, herd size,and quantity of nitrogen fertilizer applied, present the best scope of reducing nitrogen surplusthus improving environmental efficiency of the dairy farms. Reducing imported feed byrelying more on home grown feed can also help reduce nitrogen surplus. This is feasiblebecause dairy farmers in the KwaZulu-Natal Midlands can produce most of the feed on farm.In summary, to obtain environmental efficiency milk production would have to be reduced by80 litres per hectare; farm size by 73.69 ha; herd size by 33 cows, nitrogen fertilizerapplication by 74.3 kilograms per hectare; and imported feed by 13.4 kilograms of dry matterper hectare. The adjustments that would be required if environmentally inefficient farms wereto adopt best practice technology and move towards their environmental production frontiersindicate that the production of pollutants (nitrogen surplus) could be reduced at negligiblecost to milk production. The positive correlation between technical and environmentalefficiencies indicates that improving environmental efficiency could be associated withimprovements in technical efficiency. Thus, policies aimed at improving both efficienciescould have substantial rewards.

[发布机构] Stellenbosch University