Efficiency and total factor productivity in Ukrainian agriculture in transition

Abstract

This article analyzes efficiency and total factor productivity (TFP) change of large agricultural enterprises during their transition to a market economy in Ukraine. Efficiency is calculated by Data Envelopment Analysis and productivity change is measured by the Malmquist Productivity Change Index in the period between 1990 and 1999. On average, TFP declined by 6% annually, dropping a total 42%. The main reason for the observed TFP decline is a decrease in technical efficiency, which is found to be remarkably significant. At the same time there is a high variation among individual enterprises: the distribution of efficiency scores widens, which indicates that the farms diverge with respect to their economic performance. A Tobit regression analysis is conducted in which efficiency scores are related to factors such as farm type, farm size, initial conditions, and legal form.JEL classification: Q12, D25, O1, O4, P3

Grain Production Trends in Russia, Ukraine, and Kazakhstan in the Context of the Global Climate Variability and Change

“…A select group of larger agricultural enterprises in Russia, Ukraine, and Kazakhstan may benefit from economic globalization by focusing on production of export commodities. However, many small to medium size farms in the post-Soviet states are threatened with failure due to removal of subsidies, volatile crop prices, competition with cheaper and/or better quality imports, inability to obtain credit, limited access to international markets, and shortage of inputs, such as high-quality seed, fertilizers, herbicides, machinery, and irrigation [45,47,48]. As Leichenko and O'Brien [47] demonstrated in a study on agriculture in southern Africa, farmers must adapt simultaneously to change in climate and in global markets; thus, the vulnerability/resilience of food production to the change must be considered from multiple perspectives.…”

“…Interviews in several former-USSR countries indicate that food security is generally perceived in this region as one of the key responsibilities of the state and people generally tend to blame poor economic situation and increasing food prices on the failure of the government [44]. There is still negative attitude of the population to the removal of agricultural subsidies and institution of the land market [45]. These attitudes of stakeholders might be the key factor explaining why the three countries have been slow and Many national-scale institutional changes in the post-Soviet economies have developed as direct or indirect responses to globalization after the newly independent states emerged from the closed and highly regulated economic spaces of the USSR and Council for Mutual Economic Assistance (COMECON) into the more open and volatile spaces of regional and global markets [5].…”

“…However, many former-USSR countries are still in the process of restructuring their agricultural policies. Two other critical variables to increasing grain production and export are the development of credit institutions and the modernization of infrastructure [41,45,53]. Renewing existing agricultural machinery and purchasing the new equipment would require large capital investments, but the existing credit system and leasing arrangements limit the flow of capital for investments.…”

Competitiveness, Productivity and Efficiency in the Agricultural and Agri-Food Sectors

“…The literature is not, however, clear whether the efficiency distribution is censored at 1, in which case a Tobit model can be preferred (e.g. Nasr et al, 1998;Lissitsa and Odening, 2005;Davidova and Latruffe, 2007) or whether the distribution is truncated at one, in which case a truncated regression may be used (e.g. Simar and Wilson, 2007;Bojnec and Latruffe, 2009).…”

Compétitivité, productivité et efficacité dans les secteurs agricole et agroalimentaire

“…Toutefois, compte tenu de la nature bornée de la méthode DEA (scores d"efficience bornés à 1), les chercheurs ont été incités à recourir à d"autres modèles. Cependant, la littérature n"indique pas clairement si la distribution de l"efficience est strictement limitée à 1, auquel cas on peut préférer un modèle Tobit (par exemple, Nasr et al, 1998 ;Lissitsa et Odening, 2005 ;Davidova et Latruffe, 2007) ou si elle est tronquée à 1, auquel cas une régression tronquée peut être utilisée (par exemple, Simar et Wilson, 2007 ;Bojnec et Latruffe, 2009). …”