Economic and Environmental Aspects of Agriculture in the EU Countries

Abstract

The analysis of the economic efficiency of agriculture has been the subject of numerous studies. An economically efficient agricultural sector is not always environmentally efficient. Agriculture is a large emitter of greenhouse gases. The Intergovernmental Panel on Climate Change states that food production and agriculture are responsible for 21–37% of total global CO2 emissions. Due to the comprehensive assessment of the agricultural efficiency, it is worthwhile to apply to its measurement an integrated approach based on economic, energy and environmental aspects. These aspects were the main reasons for undertaking this research. The purpose of the study was to determine the economic, energy and environmental efficiency of agriculture in the EU Member States in 2019. The environmental analyses relate to the period 1990–2019. A total of 26 member states of the European Union (excluding Malta and Luxembourg) were selected for research. The sources of materials were Eurostat and the European Environmental Agency. This study was based on the Data Envelopment Analysis method, and used the DEA model focused on minimizing inputs. The research also adopts energy productivity and greenhouse gas emission efficiency indicators. The DEA model features the following variables: one effect (value of agricultural production) and four inputs (land, labour, use of fertilizers and use of energy). It was found that seven out of the 26 studied EU countries have efficient agriculture. The efficient agriculture group included The Netherlands, Denmark, Greece, Cyprus, the United Kingdom, Italy and Ireland. Based on the DEA method, benchmarks have been defined for countries with inefficient agriculture. On the basis of these benchmarks for inefficient agricultural sectors, it was possible to determine how they could improve efficiency to achieve the same results with fewer inputs. This issue is particularly important in the context of sustainable agricultural development. In the next stage of the research, the analysis of economic and energy efficiency was combined with the analysis of GHG emission efficiency in agriculture. Four groups of countries have been distinguished: eco-efficiency leaders, eco-efficiency followers, environmental slackers, eco-efficiency laggards. The leaders of the classification were The Netherlands, Italy, Greece, Cyprus and Portugal.