Werner Kleinhanss
Institute of Farm Economics
Development of Productivity and
Performance in German Dairy and Pig
Farms
IERIGZ Conference, Ciechocinek (PL), December 10-12, 2012
1. Introduction
· Different methods
· Non Parametric
– Index based
• Fischer based on Laspeyres, Paasche (approaching
quadratic function)
• Tornqvist (approaching Translog function)
– DEA based
• Malmquist
• Hicks-Moorsteen
• Lowe / Färe-Primont
· Parametric
– Stochastic Frontier Analysis (SFA)
Werner Kleinhanss
2
Introduction (2)
· CEPA of Queensland University AU provides DPIN software
standard version free-of-charge; computes i.e. Malmquist, HicksMoorsteen and Färe-Primont Indexes
(http://www.uq.edu.au/economics/cepa/dpin.php)
· Färe-Primont Indexes (O'Donnell 2011)
– Based on DEA
• Multi-outputs / inputs, combining monetary and physical
variables
• No price vector required; instead use of shadow prices of the
LP model
Werner Kleinhanss
3
2 Method and data: Färe-Primont index (distance
function)
Index referring to a reference farm_k in period_s (s=1)
•
TFP index calculation in 2 steps:
•
After 1st run: select farm_k with TFP close to the average
TFP in period_s
•
Farm_ks used as reference for the 2nd run
Werner Kleinhanss
4
Data: Balanced farm panels based on nat. FADN
Dairy farms in the North of Germany (Lower Saxony and
Schleswig Holstein)
·
> 30 dairy cows in 2009/10; N = 170, (1996/97 – 2010/11)
– 3 outputs: milk (€), other returns (€), subsidies (€);
– 5 inputs: var. inp crops (€), livestock (€), other (€, excl. land rentals and hired
labour costs); UAA (ha), AWU
Pig farms (fattening / piglets) Germany
·
2000/1 to 2010/11, based on national FADN
– Fattening N = 364; Piglets N = 195
– Outputs: pigs (€); other (€);
– Inputs: livestock (€); crops (€); other [€); land (UAA ha); labor (AWU)
Werner Kleinhanss
5
3 Results
3.1
3.2
3.3
TFP Dairy farms
TFP Pig farms
TFP versus development of income
Werner Kleinhanss
6
3.1 Development and decomposition of
productivity (example of one farm)
Decomposion of TFP (farm 10)
2,25
2,00
dTFP = dQ/dX
dTFP = dTech*dTFPE
dQ
dX
aggregated
output & input
dTFP
Technical efficiency
Output oriented eff.
Output oriented
scale-mix eff.
Index
1,75
1,50
1,25
1,00
0,75
Year
Werner Kleinhanss
Source: Own Calculations based on BMELV Testbetriebe.
7
3.1 Variation of TFP between 1996/07 and 2010/11
(sample of dairy farms)
extreme values
(outlier)
64
28
1.6
151
126
max
(excl. outlier)
112
68
Färe-Primont-Index
1.4
Q3
50 %
1.2
Median
1.0
Q1
0.8
33
54
76
min
0.6
Y96/7
Werner Kleinhanss
Y10/11
Source: Own Calculations based on BMELV Testbetriebe.
8
Development and variation of TFP dairy farms
1.6
Färe-Primont-Index
1.4
1.2
1.0
0.8
0.6
Y1996_7
Y97_8
Werner Kleinhanss
Y98_9
Y00_1
Y99_9
Y02_3
Y01_2
Y03_4
Y04_5
Y05_6
Y06_7
Y08_9
Y07_8
Y2010_11
Y09_10
Source: Own Calculations based on BMELV Testbetriebe.
9
Development of TFP dairy farms by farm size
(dairy cows)
1.30
1.25
Mean
Färe-Primont-Index
30 - 60
1.20
1.15
60 - 100
> 100
1.10
1.05
1.00
0.95
0.90
Y1996_7
Y98_9
Y00_1
Y02_3
Y04_5
Y06_7
Y08_9
Y2010_11
Y97_8
Y99_9
Y01_2
Y03_4
Y05_6
Y07_8
Y09_10
Werner Kleinhanss
Source: Own Calculations based on BMELV Testbetriebe.
10
3.2 Development and variation of TFP of farms
specialized in pig fattening
1.4
Färe-Primont-Index
1.2
1.0
0.8
0.6
0.4
Y2000_1
Werner Kleinhanss
Y02
Y03
Y04
Y05
Y06
Y07
Y08
Y09
Y10
Y2010_11
Source: Own Calculations based on BMELV Testbetriebe.
11
Development and variation of TFP of farms
specialized in piglet production
1.4
Färe-Primont-Index
1.2
1.0
0.8
0.6
0.4
Y2000_1
Werner Kleinhanss
Y02
Y03
Y04
Y05
Y06
Y07
Y08
Y09
Y10
Y2010_11
Source: Own Calculations based on BMELV Testbetriebe.
12
TFP of farms specialized in fattening / piglet
production … by farm size (LU-pig)
Farms specialized in pig fattening
TFP (FärePrimont)
1,2
Mean
1,1
< 50
1
50 - 100
100 - 150
0,9
> 100
0,8
0,7
Y2000/1
Y02
Y03
Y04
Y05
Y06
Y07
Y08
Y09
Y10
Y2010/11
Farms specialized in piglet production
TFP (FärePrimont)
1,2
Mean
1,1
< 50
50 - 100
1
100 - 150
> 100
0,9
0,8
0,7
Y2000/1
Y02
Y03
Y04
Y05
Y06
Y07
Y08
Y09
Y10
Y2010/11
Year
Werner Kleinhanss
Source: Own Calculations based on BMELV Testbetriebe.
13
3.3 Comparing income (FFI) and TFP
– Dairy farms
– Pig farms
Werner Kleinhanss
14
3.3 Dairy farms: development of TFP and income
(FFI)
300
TFP
Index (1996/7 = 100)
250
Income
200
150
100
50
Y1996_7
Y98_9
Y97_8
Werner Kleinhanss
Y00_1
Y99_9
Y02_3
Y01_2
Y04_5
Y03_4
Y06_7
Y05_6
Y08_9
Y07_8
Y2010_11
Y09_10
Source: Own Calculations based on BMELV Testbetriebe.
15
Index (2000/1=100)
Pig farms: TFP versus income (FFI)
Pig fattening income/TFP (2000/1 = 100)
120
100
80
60
40
20
0
TFP_Fatt
Inc_Fatt
Index (2000/1=100)
Y2000/1
Y02
Y03
Y04
Y05
Y06
Y07
Y08
Y09
Y10
Y2010/11
Piglet production income/TFP (2000/1 = 100)
120
100
80
60
40
20
0
TFP_Sows
Inc_Sows
Y2000/1
Werner Kleinhanss
Y02
Y03
Y04
Y05
Y06
Y07
Y08
Y09
Y10
Y2010/11
Source: Own Calculations based on BMELV Testbetriebe.
16
4 Conclusion
· Rather low changes of TFP
– High variation of TFP between farms
• Dairy farms: increase
• Pig fattening: constant
• Piglet production: decreasing
– Variation in time rather low compared to income,
especially in the last few years. Reasons…
• TPF model highly aggregated wrt outputs and inputs
(inclusion of more variables)
– TFP results should be compared / validated with other
methods, i.e. Fischer Index
Werner Kleinhanss
17
References
·
O’Donnell (2011) DPIN 3.0 A PROGRAM FOR DECOMPOSING
PRODUCTIVITY INDEX NUMBERS
http://www.uq.edu.au/economics/cepa/dpin.php
·
O'Donnell, C. J. (2010). "Nonparametric Estimates of the Components of
Productivity and Profitability Change in U.S. Agriculture." Centre for
Efficiency and Productivity Analysis Working Papers WP02/2010.
University of Queensland.
http://www.uq.edu.au/economics/cepa/docs/WP/WP022010.pdf.
·
O'Donnell, C. J. (2011) "The Sources of Productivity Change in the
Manufacturing Sectors of the U.S. Economy." Centre for Efficiency and
Productivity Analysis Working Papers WP07/2011. University of
Queensland.
http://www.uq.edu.au/economics/cepa/docs/WP/WP072011.pdf.
·
O'Donnell, C. J. (2012) Econometric estimation of distance functions and
associated measures of productivity and efficiency change. J Prod Anal
·
DOI 10.1007/s11123-012-0311-1,
http://www.springerlink.com/content/e711457qp8541733/
Werner Kleinhanss
18
Annex
Werner Kleinhanss
19
Calculation of Färe-Primont Index (solving LP; aggregate
output and inputs; Shadow prices)
Solving LP´s
Output oriented
Input oriented
Aggregated output and inputs
Output
Input
Shadow prices
Output
Input
Werner Kleinhanss
20
Partial TFP indicators (average of dairy farms)
1.8
dQ
dX
1.7
dTFP
1.6
dTech
dTFPE
1.5
dOTE
dOSE
Index
1.4
dOME
dROSE
1.3
dOSME
dITE
1.2
dISE
1.1
dIME
dRISE
1.0
dISME
dRME
0.9
0.8
Y1996_7
Y98_9
Y00_1
Y02_3
Y04_5
Y06_7
Y08_9
Y2010_11
Y97_8
Y99_9
Y01_2
Y03_4
Y05_6
Y07_8
Y09_10
Werner Kleinhanss
Source: Own Calculations based on BMELV Testbetriebe.
21
Development of Income (FFI) dairy farms by farm
size
140 000
Mean
120 000
30 - 60
FFI EUR/farm
60 - 100
100 000
> 100
80 000
60 000
40 000
20 000
Y1996_7
Y97_8
Werner Kleinhanss
Y98_9
Y00_1
Y99_9
Y02_3
Y01_2
Y04_5
Y03_4
Y06_7
Y05_6
Y08_9
Y07_8
Y2010_11
Y09_10
Source: Own Calculations based on BMELV Testbetriebe.
22
Development of income (FFI) (finshed pigs / sows)
by size classes (LU-pigs)
Farms specialized in pig fattening
EUR/farm
70000
60000
Mean
50000
< 50
40000
50 - 100
100 - 150
30000
> 100
20000
10000
0
Y2000/1
Y02
Y03
Y04
Y05
Y06
Y07
Y08
Y09
Y10
Y2010/11
Farms specialzed in piglet production
EUR/farm
100000
Mean
80000
< 50
50 - 100
60000
100 - 150
40000
> 100
20000
0
Y2000/1
Y02
Y03
Y04
Y05
Y06
Y07
Y08
Y09
Y10
Y2010/11
Year
Werner Kleinhanss
Source: Own Calculations based on BMELV Testbetriebe.
23