Analyzing Technical Efficiency in Cereal Production across Selected European Union Countries

Abstract

This paper investigates the technical efficiency of cereal production in European Union (EU) countries from 2008 to 2018. The primary purpose is to estimate technical efficiency scores by country and crop and explain their variation using macroeconomic and agricultural policy variables using the stochastic frontier production function. The results indicate that the United Kingdom has the highest efficiency in barley production, while Finland has the lowest. France exhibits the highest efficiency in common wheat, and Romania has the lowest efficiency in grain maize production. This study also explores the impact of various factors on technical efficiency, finding, for example, the positive effects of female wages and foreign direct investment on barley production efficiency and the negative effects of forest area and subsidies. Similar analyses were conducted for wheat and maize production. The results indicate a variation in technical efficiency scores across crops and countries. This diversity in performance not only reflects the inherent complexities within each crop but also emphasizes the crucial role played by macroeconomic variables and agricultural policies in shaping efficiency outcomes on a country-wide scale.